A

Green
Evolution
The ‘green’
evolution at
Voltas
To meet today’s urgent and critical need
for conserving energy and protecting the
A commitment
ecology, Voltas offers a number of customised
solutions. Ranging from ‘Green’ to conserve
Voltas’ ‘Green’ solutions include specialised
buildings to ‘Star’-rated products,
systems in s Heating, Ventilation, Air
Voltas’ expertise has made an impact Conditioning & Refrigeration s Integrated
in its markets... Building Management Systems s Indoor Air Quality
and in its s Water Management & Treatment s Electricals – as
deployed in these projects.
world.

The Changi Water

Reclamation Plant,
Singapore: one of
the world’s largest
projects for sewage
treatment and water
reclamation
 Artist’s Impression
Ferrari Experience,
Abu Dhabi: featuring
design innovations
to minimise the
cooling load, energy
consumption and
carbon footprint

Rajiv Gandhi
International
Airport, Hyderabad:
Asia’s first airport
to be awarded LEED
Silver certification
Godrej Waterside for compliance with
IT Park, Kolkata: Artist’s Impression ‘Green’ norms
designed for a
LEED Gold rating,
based on functional
efficiency and
energy-saving values
 RMZ Millennia
Business Park,
Chennai: India’s
Artist’s Impression
largest built-up
area with LEED
Gold certification

Thyagaraja
Stadium, Delhi:
India’s first
‘Green’ stadium,
built for the
Commonwealth
Games 2010

Fortis Hospital,
New Delhi: multi-
speciality healthcare
facility built to TERI
GRIHA standards
of energy efficiency
and resource
conservation
 BOARD OF DIRECTORS Solicitors
Chairman Ishaat Hussain Messrs Mulla & Mulla and
Managing Director A. Soni Craigie, Blunt & Caroe
(upto 22-4-2010)
Sanjay Johri Auditors
(w.e.f. 23-4-2010) Messrs Deloitte Haskins & Sells,
Directors Nasser Munjee Chartered Accountants
N. J. Jhaveri
S. D. Kulkarni Bankers
(upto 20-9-2009)
In India
Ravi Kant
N. D. Khurody State Bank of India
N. N. Tata Bank of India
J. S. Bilimoria Punjab National Bank
S. N. Menon Citibank N. A.
Nani Javeri BNP Paribas
(w.e.f. 29-10-2009) Export - Import Bank of India
General Manager - Taxation The Royal Bank of Scotland
& Company Secretary V. P. Malhotra Overseas
Emirates NBD Bank pjsc (UAE)
AUDIT COMMITTEE
Union National Bank (UAE)
Chairman N. J. Jhaveri Abu Dhabi Commercial Bank (UAE)
Nasser Munjee HSBC Bank Middle East Limited (UAE, Qatar, Bahrain)
J. S. Bilimoria The Commercial Bank of Qatar (Qatar)
REMUNERATION COMMITTEE First Gulf Bank (UAE)
Doha Bank (Qatar)
Nasser Munjee
The Royal Bank of Scotland N. V. (Singapore)
N. J. Jhaveri Registered Office
S. N. Menon
Voltas House ‘A’,
SHAREHOLDERS/INVESTORS Dr. Babasaheb Ambedkar Road,
GRIEVANCE COMMITTEE Chinchpokli,
Mumbai 400 033
Chairman N. N. Tata

CORPORATE MANAGEMENT Share Registrars

Managing Director
President (EMP&S)
Executive Vice Presidents
TSR Darashaw Limited
Sanjay Johri 6-10, Haji Moosa Patrawala Industrial Estate,
A. K. Joshi 20, Dr. E. Moses Road, Mahalaxmi, Mumbai 400 011
M. M. Miyajiwala Tel: +91-22-6656 8484; Fax: +91-22-6656 8494
Shaukat Ali Mir email: csg-unit@tsrdarashaw.com

Senior Vice Presidents
M. Gopi Krishna
Milind M. Shahane Annual General Meeting :
Monday, 16th August, 2010 at 3.30 p.m.
Anil J. Gole at Birla Matushri Sabhagar,
Pradeep Bakshi 19, Sir Vithaldas Thackersey Marg, Mumbai 400 020.

Visit us at www.voltas.com
VOLTAS
Annual Report 2009-2010

HIGHLIGHTS

2009-10 2008-09 2007-08 2006-07 2005-06

1. SALES AND SERVICES Rs. 456508 407025 308617 245078 190418
2. OTHER INCOME Rs. 7561 9416 4632 3071 2431
3. COST OF SALES AND SERVICES (incl. Excise Duty) Rs. 320547 299802 227671 186100 145162
4. OPERATING, ADMINISTRATION AND
OTHER EXPENSES Rs. 98597 83107 57811 46537 35899
5. Staff Expenses (included in 3 & 4) Rs. (48698) (42860) (27685) (24008) (17623)
Number of Employees (including Contract Staff ) Nos. 8608 9594 7378 5848 5390
6. OPERATING PROFIT Rs. 44925 33532 27767 15512 11788
7. EXCEPTIONAL INCOME/(EXPENSES) Rs. 3639 3201 2987 6771 (2619)
8. PROFIT/(LOSS) BEFORE TAXATION Rs. 48564 36733 30754 22283 9169
Percentage to Sales % 10.6 9.0 10.0 9.1 4.8
Percentage to Total Assets % 47.9 42.8 52.5 48.1 29.3
9. TAXATION Rs. 14142 11474 9917 3675 2120
10. PROFIT/(LOSS) AFTER TAXATION Rs. 34422 25259 20837 18608 7049
Percentage to Sales % 7.54 6.2 6.8 7.6 3.7
Percentage to Shareholders’ Funds % 34.6 34.6 38.7 48.9 29.2
11. RETAINED PROFIT Rs. 26705 19065 15610 14737 4785
12. DIVIDEND ON EQUITY CAPITAL Rs. 6618 5294 4467 3309 1985
Percentage % 200 160 135 100 60
13. FIXED ASSETS (AT COST) Rs. 31399 30358 28178 24493 28074
14. DEPRECIATION Rs. 13931 13053 12228 11506 14592
15. INVESTMENTS Rs. 33997 23580 26793 13741 6103
16. NET CURRENT ASSETS Rs. 48062 42700 13813 16594 9089
17. DEFERRED TAX ASSET (NET) Rs. 1903 2158 2043 2967 2668
18. DEFERRED REVENUE EXPENDITURE Rs. — — — — —
19. TOTAL ASSETS Rs. 101430 85743 58599 46289 31342
20. SHARE CAPITAL Rs. 3307 3307 3307 3307 3306
21. RESERVES AND SURPLUS Rs. 96215 69592 50525 34768 20835
22. SHAREHOLDERS’ FUNDS Rs. 99522 72899 53832 38075 24141
Equity per Share Rs. *30.08 *22.03 *16.27 *11.50 72.96
Earnings per Share Rs. *10.40 *7.63 *6.30 *5.62 21.3
Number of Shareholders Nos. 98788 119549 81371 96312 52365
Share Prices on Stock Exchange - High Rs. *190 *197 *267 *120 1088
- Low Rs. *46 *31 *79 *75 218
23. BORROWINGS Rs. 1908 12844 4767 8214 7201
Debt/Equity Ratio % 2 18 9 22 30
(Percentage to Shareholders’ Funds)

Note : All amounts are Rupees in lakhs except those marked

* Face Value of Re. 1 each
 Rs. in Lakhs
2004-05 2003-04 2002-03 2001-02 2000-01 1994-95 1984-85 1974-75 1964-65 1954-55
144143 132994 123041 94066 85372 81089 26607 15934 4223 991 1
1953 1688 1413 1243 1211 759 150 40 5 2 2
108570 100562 101926 74302 66223 60368 21080 13856 3468 815 3

32264 30422 20122 19190 18641 19225 5556 1955 522 153 4
(14435) (12619) (12573) (10982) (10030) (9997) (3170) (1031) (363) (109) 5
5747 4484 5147 5096 5314 10667 8147 7252 5082 2324
5262 3698 2406 1817 1719 2255 121 163 238 25 6
504 989 499 (146) (1147) (78) — — — — 7
5766 4687 2905 1671 572 2177 121 163 238 25 8
4.0 3.5 2.4 1.8 0.7 2.7 0.5 1.0 5.9 2.5
19.2 17.2 11.5 5.9 2.0 5.0 1.1 4.6 18.3 6.5
725 784 347 (12) 14 5 Nil 83 141 11 9
5041 3903 2558 1683 558 2172 121 80 97 14 10
3.5 2.9 2.1 1.8 0.6 2.7 0.5 0.5 2.3 1.4
26.1 20.6 15.9 9.0 3.6 13.2 4.1 6.7 17.6 9.1
3155 2783 1624 1088 120 997 23 5 59 6 11
1654 993 827 596 397 1158 98 75 38 8 12
50 30 25 18 12 35 10 12 15 5.5
24858 24751 23987 23140 26328 30651 5014 1232 447 53 13
16615 12491 11799 10500 12097 10718 1580 642 82 3 14
4622 4547 3626 3139 3127 8245 512 132 67 – 15
14974 9396 7107 6241 5962 14230 6583 2859 867 336 16
2153 1021 1375 1169 — — — — — — 17
— — 899 5317 5634 720 — — — — 18
29992 27224 25195 28506 28954 43128 10529 3581 1299 386 19
3305 3305 3305 3305 3305 3428 978 623 255 150 20
16046 15595 12811 15496 12202 13048 2002 570 295 4 21
19351 18900 16116 18801 15507 16476 2980 1193 550 154 22
58.48 57.12 48.7 56.8 46.9 49.5 305 191 216 1027
15.2 11.8 7.7 5.1 1.7 6.8 12 13 38 93
53674 60622 72174 76512 83615 84180 45237 14395 7356 150
248 159 66 57 60 176 470 211 276
88 50 42 31 26 92 356 125 183
10641 8324 9079 9705 13447 26652 7549 2388 749 232 23
55 44 56 52 87 162 253 200 136 151
VOLTAS
Annual Report 2009-2010

CONTENTS

Significant Trends at Voltas - Consolidated 1-2 Consolidated Financial Statements

Report of the Board of Directors 3-8 Auditors’ Report 77

Annexure to the Directors’ Report 9 Balance Sheet 78

Management Discussion and Analysis 10-19 Profit and Loss Account 79

Report on Corporate Governance 20-32 Cash Flow Statement 80-81

Auditors’ Report 33-35 Schedules forming part of the

Consolidated Balance Sheet and
Profit and Loss Account 82-106

Balance Sheet 36

Details of Subsidiary Companies 107

Profit and Loss Account 37

Cash Flow Statement 38-39

Schedules forming part of the

Balance Sheet and Profit and
Loss Account 40-75

Balance Sheet Abstract and

Company’s General Business Profile 76
 SIGNIFICANT TRENDS AT VOLTAS (CONSOLIDATED)

SALES AND SERVICES OPERATING PROFIT

NET WORTH RETURN ON CAPITAL EMPLOYED %

1
VOLTAS
Annual Report 2009-2010

SIGNIFICANT TRENDS AT VOLTAS (CONSOLIDATED)

DIVIDEND % ON EQUITY CAPITAL EARNINGS PER SHARE (RS.)*

PROFIT BEFORE EXCEPTIONAL CASH GENERATED FROM OPERATIONS

ITEMS AND TAX AS % TO TURNOVER

(Rs. in crores)

2
 REPORT OF THE BOARD OF DIRECTORS

To the Members
Your Directors have pleasure in presenting their Fifty-Sixth Annual Report and the Audited Statement of Accounts for the
year ended 31st March, 2010.

FINANCIAL RESULTS

Rs. in Crores
Stand-alone Consolidated

2009-10 2008-09 2009-10 2008-09

2. Sales and Services 4565 4070 4830 4374

Profit for the year after meeting all expenses but before
depreciation and exceptional items 465 352 528 367

Depreciation 16 17 21 21

Profit before exceptional items 449 335 507 346

Exceptional items 36 32 25 26

Profit before tax 485 367 532 372

Provision for taxation including deferred tax and

MAT credit entitlement 141 115 147 117

Profit after tax 344 252 385 255

Minority Interest and Share of Loss of Associate — — (4) (3)

Profit after Minority Interest and Share of Loss of Associate 344 252 381 252

Adding thereto:
- Balance brought forward from the previous year 62 59 71 73

- Amount transferred from Foreign Projects Reserve 3 3 3 3

- Foreign Exchange Translation Difference — — (1) 3

Profit available for appropriations 409 314 454 331

Appropriations:
- General Reserve 250 190 251 197

- Proposed Dividend 66 53 66 53

- Tax on Dividend 11 9 11 9
- Legal and Special Reserves — — 1 1
Leaving a balance to be carried forward 82 62 125 71

3
VOLTAS
Annual Report 2009-2010
REPORT OF THE BOARD OF DIRECTORS, continued
DIVIDEND
3. The Company’s dividend policy is based on the need
to balance the twin objectives of appropriately rewarding the
shareholders with dividend and of conserving resources to
meet the Company’s future needs. The Directors recommend
a dividend of Rs.2 per equity share of Re.1 each (200%) for
the year 2009-10 (2008-09: 160%).
OPERATIONS
4. The after-effects of the global slowdown of
2008, spilled over into the first half of the financial year
2009-10. Though there was an improvement in the domestic
business environment in the latter half of the financial
year, the emergence of the Dubai debt crisis again created
some uncertainty about the pace and extent of the global
economic recovery.
5. Against this backdrop, the Turnover of the Company
grew by 12% to Rs.4565 crores and the Profit before Tax
increased by over 32% to Rs.485 crores. The Earning per share
for the year was Rs.10.40, an increase of 36%.
6. The growth of the Company was due to both
external factors as well as the efforts of the Management.
On the external front, as the general outlook improved
and consumers resumed spending, there was a significant
pick-up in the consumer durables sector and this benefited
our Unitary Products Business. A planned expansion of the
distribution channel, improved supply chain management
and better product-mix and an aggressive advertising
strategy fuelled growth of sales of both Room Air
Conditioners as well as Refrigeration products in India.
7. The effective execution of projects by the Company’s
international electro-mechanical business also contributed
significantly to the improved profitability of the Company.
Your Company won laurels for its role in completing
the Formula 1 Race Track in Abu Dhabi, a project of
world-class quality that was implemented under very
demanding time-lines. The Company also played a significant
role in completing the electro-mechanical works on the
iconic Burj Khalifa Tower in Dubai, the world’s tallest building,
in time for the opening in early-2010.
8. The general economic uncertainty did, however,
lead to a slowdown in the award of new electro-mechanical
projects, both domestically and overseas. An overhang of
supply in the commercial buildings sector has slowed down
4
the pace of implementation of new projects. To mitigate this
impact, your Company is making a deliberate move to take on
more electro-mechanical projects in the industrial segment,
including building up capabilities and requisite technical
pre-qualifications. The Company’s equity stake in Rohini
Industrial Electricals Limited was in line with this strategy,
enabling it to expand the domestic project offerings significantly
into electrical contracting. The rising price of oil has also led to a
sustained thrust by governments in the Middle East, particularly
the GCC countries, to encourage construction projects and your
Company has picked up some new contracts in 2010.
9. The Engineering Products and Services businesses
have also seen a pick up in activity during the year, both
in the textile machinery business as well as in mining and
construction equipment business. Though the pace of
activity is below the peak reached earlier, companies are
again beginning to invest in capital goods and the trend
is encouraging.
10. Your Company’s management took several initiatives
to mitigate the volatility in global metal prices as well as
currency fluctuations, entering into advance contracts
where feasible. There was also a conscious thrust to evolve
a leaner cost structure and this enabled the Company to
improve its performance.
FINANCE
11. The Company’s policies in respect of finances and
foreign exchange helped the Company steer through a
challenging environment.
12. The Company’s cash flow for the year has been good
and in line with profitability. With continued good working
capital management, the amount and number of days of
receivables have declined. Most of the excess stock has been
liquidated. At the end of the year, the Company held liquid
investments in excess of Rs.200 crores as against Rs. 121
crores at the end of the previous year. The return on liquid
investments has been lower compared to the previous year
due to the low interest yields that prevailed during the year.
The Company has also given advances to its subsidiary
companies to meet their liquidity imbalances and reduce
dependence on external financing. With efficient realization
of collections, the Company has reduced floats in the system.
In the International Operations, cash balances have risen from
Rs.240 crores per end of the previous year to Rs. 308 crores.
During the year, the Company invested around Rs. 24 crores
REPORT OF THE BOARD OF DIRECTORS, continued
in acquiring a further 16% shareholding in Rohini Industrial
Electricals Limited and the Company now owns 67% in Rohini.
The Company’s external debt, at the year end was negligible at
Rs.19 crores and the Net Worth was Rs.995 crores.
13. On management of foreign exchange, except
conversion of balances held overseas, the results have been
encouraging. The Company’s philosophy is to hedge the
known risks in a conservative manner.
TATA BUSINESS EXCELLENCE MODEL (TBEM)
14. As a part of ongoing efforts to create a culture of
continuous improvement and total employee engagement,
the Company focused on various initiatives, such as Six
Sigma, Process Management & Process Improvement,
Strategy Deployment Matrix and Total Productive
Maintenance. These have been progressing well, and
providing the desired benefits. The Company has undertaken
implementation of OHSAS 18001 in its drive towards a strong
and effective safety policy.
15. During the year, the international Electro-Mechanical
business (EM) and the domestic Electro-Mechanical and
Refrigeration business (EM&R) participated in the Tata Group
level TBEM External Assessment. While the performance of
EM&R was steady as compared to the previous assessment,
the performance of EM showed considerable improvement,
entitling the business to an award at the Group level.
Both EM and EM&R began work on action plans for further
improvements based on feedback reports from the
Assessments. The Company has developed a pool of trained
TBEM Assessors to support its Business Excellence initiatives
and also to provide External Assessors at the Group level.
IT INITIATIVES
16. During the year under review, the Company initiated
and completed several strategic projects in IT. The Human
Capital Management (SAP-HCM) system for overseas
employees integrated all employees on a single platform,
yielding better control over manpower costs. SAP modules
implemented for international Electro-mechanical business
would result in better project management through
increased visibility and operational control.
17. Customer Relationship Management (CRM) software
implemented for the domestic Electro-mechanical business
will help in better service delivery of maintenance projects.
Unitary Products business upgraded its existing CRM
5
software by incorporating Dealers’ Service Reports and
claims, with linkage through the SAP system.
18. The upgrade of SAP to the latest version would
also enable the Company comply with the reporting
requirements proposed under IFRS.
COMMUNITY DEVELOPMENT
19. The Company plays an active role in improving the
quality of life of the communities amongst which it operates,
through a well-defined framework for implementing its
Community Development philosophy.
20. Through its Core Competency projects, the Company
continues to provide hands-on technical training to youth
from less privileged backgrounds. The involvement of the
Company in terms of employees’ time, knowledge and
interest, as well as financial assistance, goes a long way
towards the projects’ usefulness and productivity.The
objective of the programme is to impart vocational training
to underprivileged youth to empower them, educate them,
and enhance their employability. The Company continues
to partner with the Joseph Cardijn Technical School,
Mumbai, from which 15 batches covering 214 students have
completed the course successfully since 2002. The Company
has also partnered with Bosco Boys, Mumbai, with one
batch of 9 students so far; and GMR Varalakshmi Foundation,
Hyderabad, with 5 batches of 83 students to date. Soft-skills
programmes in Communication, Personality Development
and Customer Care are being conducted for the students.
21. As part of the implementation of its Affirmative
Action policy, in accordance with CII guidelines, the
Company has rolled out initiatives in the areas of
Employment, Employability, Entrepreneurship and Aid in
Education. The Company has adopted the Policy of Positive
Discrimination in recruitment towards candidates belonging
to SC/ST communities. Similarly, the Company has a
tie-up with selected Technical Institutes across India in
order to increase scope for employment among trainees
from SC/ST communities. Hitherto about 93 trainees from
SC/ST candidates have completed the Technical Training and
about 28 trainees have been deployed on overseas projects.
Similarly, in the areas of employability and entrepreneurship,
the Company has put in place a scheme for providing
capacity-building training in housekeeping and gardening to
SC/ST candidates. Three batches have successfully completed
the training under this scheme.
VOLTAS
Annual Report 2009-2010
REPORT OF THE BOARD OF DIRECTORS, continued
22. As part of Aid-in-Education, the Company
provides monetary help to deserving SC/ST students
from engineering colleges. During the year, the Company
extended scholarships to 24 students from the Mechanical
and Electrical streams. In addition, the Company sponsored
a youth delegate to the Climate Change Convention held
at the Bella Centre in Copenhagen, Denmark. The Company
is also working towards adopting appropriate policies for
positive discrimination in the areas of employment and
vendor development.
23. In accord with its commitment to energy-saving and
‘green’ initiatives, the Company partnered with The Energy
& Resources Institute (TERI) to sponsor electrification of
10 villages entirely through sustainable energy sources. The
initiative was carried forward by Unitary Products business,
linked to a nationwide drive to promote awareness of
energy-saving products such as Voltas’ ‘Star-rated’ ACs.
24. During the year, the Company’s volunteers
participated in numerous activities, including care for the
elderly, income generation programmes, tutoring and
mentoring of orphans and underprivileged, volunteer visits
to care-giving institutions, blood donation drives, awareness
programmes such as for Road Safety and Environment,
and assistance to SC/ST children with specialized English-
language classes and mid-day meals.
25. Voltas Organisation of Women (VOW), exclusively
run by lady employees and the wives of male employees,
continued to live up to its objective of helping the needy by
way of providing financial assistance in the field of health and
education and promoting the upliftment of women. In 2009,
VOW organized street plays on human trafficking, domestic
violence and property rights of women. VOW also supported
vocational training for women through its various partners.
GLOBAL COMPACT AND CARBON DISCLOSURE PROJECT
26. The Company is a signatory to the Global Compact
and adheres to the ten key principles based on universally
agreed and internationally applicable values and goals in the
areas of Human Rights, Labour Standards and Environment.
27. The Company is also a signatory to the Carbon
Disclosure Project initiated by CDP-UK with Confederation
of Indian Industries and World Wild Life Fund. The Company
shares information pertaining to sustainability-related issues
with CDP, on an annual basis.
6
ENVIRONMENT AND SAFETY
28. Towards this end the Company recently completed a
Carbon Footprint mapping exercise for all its manufacturing
plants and has undertaken initiatives to reduce its Carbon
Footprint. During the year, the Company formally adopted a
Policy on Climate Change. The Thane Manufacturing Plant is
in an advanced stage of ISO 14001 standard implementation,
which deals with environmental issues. The Company has
also reached an advanced stage of OHSAS 18001 standard
implementation at one of its manufacturing plants, one
project site and at the Head Office. During the year this
initiative will be further extended to other parts of the
organization. All the manufacturing plants have appropriate
safety initiatives under way, headed by senior officials who
diligently oversee the safety aspect.
STATEMENT OF EMPLOYEES’ PARTICULARS
29. The information required under Section 217(2A) of
the Companies Act, 1956 and the Rules made thereunder, is
provided in an Annexure forming part of this Report. In terms
of Section 219(1)(b)(iv) of the Act, the Report and Accounts
are being sent to the shareholders excluding the aforesaid
Annexure. Any shareholder interested in obtaining a copy of
the same may write to the Company Secretary.
APPOINTMENT OF COST AUDITOR
30. As per the directions given by the Central
Government, the Company has, based on an application
made, received the Government’s approval for
re-appointment of M/s. Sagar & Associates, a firm of Cost
Accountants as the Cost Auditors of the Company for the
year ending 31st March, 2011 in respect of refrigeration
products manufactured by the Company.
APPOINTMENT OF TSR DARASHAW LIMITED AS
REGISTRAR AND SHARE TRANSFER AGENT
31. In order to benefit from the specialized services
provided by TSR Darashaw Limited (TSRDL) and taking into
consideration, various other factors including costs and
upgradation of IT systems, the Company was in dialogue
with TSRDL for providing depository related services for the
shares held in demat form and as Transfer Agent in respect
of shares held in physical form. TSRDL are the Registrars and
Share Transfer Agents for most of the listed Tata companies.
Accordingly, at the last Annual General Meeting held on
10th August, 2009, the Company had taken the approval
REPORT OF THE BOARD OF DIRECTORS, continued
of the shareholders for keeping the Registers and Indexes
of Members and Debentureholders and copies of Annual
Returns and other relevant documents in the premises of
TSRDL in addition to the Registered Office and/or such
other office building within the premises of the Company
at Chinchpokli. The transfer of share related activities
including records and database has been completed and
TSRDL has been appointed as the Registrar and Share
Transfer Agent of the Company from 8th March, 2010. A
suitable announcement to that effect was published in the
newspapers and individual intimation was also sent to all the
shareholders.
SUBSIDIARIES
32. Pursuant to the Accounting Standard AS-21 issued by
the Institute of Chartered Accountants of India, Consolidated
Financial Statements presented by the Company include
the financial information of subsidiary companies, namely
Weathermaker Limited, Saudi Ensas Company for Engineering
Services W.L.L., Metrovol FZE, VIL Overseas Enterprises B.V.,
Voice Antilles N.V., Universal Comfort Products Limited,
Rohini Industrial Electricals Limited, Simto Investment
Company Limited and Auto Aircon (India) Limited. In terms
of the approval granted by the Central Government under
Section 212(8) of the Companies Act, 1956, copy of the
Balance Sheet, Profit and Loss Account, Directors’ Report,
Auditors’ Report and other documents of the aforesaid
subsidiary companies for the year ended 31st March, 2010
(31st December, 2009 in case of Weathermaker and Saudi
Ensas), have not been attached to the Balance Sheet of the
Company. A statement giving details of turnover/income, net
profit, dividend, share capital, reserves and surplus, assets
and liabilities, etc. of the aforesaid subsidiaries forms part of
the Annual Report. The Annual Accounts of the subsidiary
companies are open for inspection by any member/
investor and also available on the website of the Company -
www.voltas.com. The Company will make the documents/
details available, upon request by any member of the
Company or its subsidiaries interested in obtaining the same.
33. Weathermaker Limited (WML) engaged in the
business of manufacturing galvanized iron, aluminium,
black mild steel and stainless steel duct is a wholly-owned
subsidiary of the Company and has its manufacturing facility
in Jebel Ali Free Zone, UAE. WML has reported turnover of
AED 33.423 million and profit of AED 5.053 million for the
year ended 31st December, 2009.
7
34. The rehabilitation/financial restructuring of Saudi
Ensas Company for Engineering Services WLL (Saudi
Ensas), a wholly-owned subsidiary of the Company in
Jeddah, Kingdom of Saudi Arabia (KSA) is almost complete.
Saudi Ensas is engaged in the execution and operations/
maintenance of electro-mechanical installations in KSA
and has for the year ended 31st December, 2009, recorded
turnover of SR 10.248 million and net profit of SR 0.109
million. The Company has provided financial assistance from
time to time, aggregating SR 19.955 million (equivalent to
Rs.24 crores approx.) to Saudi Ensas. KSA has huge business
potential and provides good opportunity to the Company’s
overseas electro-mechanical business. It was therefore
decided to establish a branch office of the Company in
KSA, subject to requisite approvals including commercial
registration. While small and medium size projects would
be catered to by Saudi Ensas, large size projects would be
executed by the Company’s branch office in KSA.
35. Universal Comfort Products Limited (UCPL), a wholly-
owned subsidiary of the Company, engaged in the business
of manufacturing air conditioners, has recorded a turnover of
Rs.332 crores and net profit of Rs.14 crores for the year ended
31st March, 2010.
36. During the year under review, the Company increased
its shareholding in Rohini Industrial Electricals Limited (RIEL)
from 51% to 67.33% of its share capital. RIEL is engaged in
undertaking large turnkey electrical and instrumentation
projects for industrial and commercial sectors and recorded
turnover of Rs. 214 crores and net profit of Rs. 9 crores for the
year ended 31st March, 2010.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION
AND FOREIGN EXCHANGE EARNINGS AND OUTGO
37. Information pursuant to Section 217(1)(e) of the
Companies Act, 1956, read with the Companies (Disclosure
of Particulars in the Report of Board of Directors) Rules,
1988, relating to conservation of energy and technology
absorption is given by way of an Annexure to this Report. As
for information in respect of foreign exchange earnings and
outgo, the same has been given in the notes forming part of
the accounts for the year ended 31st March 2010.
DIRECTORS’ RESPONSIBILITY STATEMENT
38. Pursuant to Section 217(2AA) of the Companies Act,
1956, the Directors, based on the representations received
from the Operating Management, confirm that:
VOLTAS
Annual Report 2009-2010
(a) in the preparation of the annual accounts, the
applicable accounting standards have been followed and
that there are no material departures;
(b) they have, in the selection of the accounting policies,
consulted the Statutory Auditors and have applied their
recommendations consistently and made judgements and
estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company at the
end of the financial year and of the profit of the Company for
that period;
(c) they have taken proper and sufficient care to the
best of their knowledge and ability, for the maintenance
of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the
assets of the Company and for preventing and detecting
fraud and other irregularities;
(d) they have prepared the annual accounts on a going
concern basis.
CORPORATE GOVERNANCE
39. Pursuant to Clause 49 of the Listing Agreement with
the Stock Exchanges, Management Discussion and Analysis,
Corporate Governance Report and Auditors’ Certificate
regarding compliance of conditions of Corporate Governance
are made a part of the Annual Report. A declaration signed
by the Managing Director in regard to compliance with
the Code of Conduct by the Board Members and Senior
Management personnel forms part of the Annual Report.
DIRECTORATE
40. In accordance with the provisions of the Companies
Act, 1956 and the Company’s Articles of Association,
Mr. Ishaat Hussain, Mr. Nasser Munjee and Mr. Ravi Kant
retire by rotation and being eligible, offer themselves for
re-election.
41. Mr. Nani Javeri was appointed an Additional Director
by the Board at its Meeting held on 29th October, 2009.
Mr. Sanjay Johri was appointed Additional Director and as
the Managing Director of the Company with effect from
23rd April, 2010 by the Board at its Meeting held on
19th April, 2010. In accordance with the provisions of the
Companies Act, 1956, Mr. Nani Javeri and Mr. Sanjay Johri
hold office upto the date of the forthcoming Annual General
Meeting and Notices under Section 257 of the Act have been
8
received from a member proposing their appointment as
Director of the Company. Resolutions seeking approval of
the members for appointment of Mr. Nani Javeri as a Director
and Mr. Sanjay Johri as a Director and Managing Director of
the Company have been incorporated in the Notice of the
forthcoming Annual General Meeting and the Explanatory
Statements thereto.
42 Mr. S.D. Kulkarni retired as a Director of the Company
on 20th September, 2009 on completing 75 years of age, in
line with the Company’s Retirement Policy. The Directors
place on record their sincere appreciation of the valuable
advice and guidance given by Mr. Kulkarni during his long
tenure on the Board since September 1999.
43 Mr. A. Soni retired as the Managing Director of the
Company upon expiry of his contact on 22nd April, 2010. The
Directors appreciated the enormous efforts put in by Mr. Soni
and his outstanding contribution in transforming Voltas and
for the significant improvement in the financial performance
of the Company, over the past few years. The Board of
Directors complimented the valuable services rendered and
the excellent work done by Mr. Soni during his long tenure
on the Board since September 2000.
AUDITORS
44. At the Annual General Meeting, members will be
required to appoint Auditors for the current year. Messrs.
Deloitte Haskins & Sells, the present Auditors of the Company
have pursuant to Section 224(1) of the Companies Act,
1956, furnished a certificate regarding their eligibility for
re-appointment. The approval of the members is also being
sought for their appointment as the Branch Auditors of the
Company. Attention of the members is invited to Item No.9
of the Notice of the Annual General Meeting and the relevant
Explanatory Statement.
GENERAL
45. The Notes forming part of the Accounts are
self-explanatory or to the extent necessary, have been dealt
with in the preceding paragraphs of the Report.
On behalf of the Board of Directors
ISHAAT HUSSAIN
Chairman
Mumbai, 28th May, 2010
 ANNEXURE TO THE DIRECTORS’ REPORT
FORM B
DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION

1. Specific areas in which R&D carried out by the (viii) 500L Cooler.
Company
(ix) 400L Triple door Freezer.
(i) Development of large capacity (1450 TR)
co-generation Vapour Absorption Machine (VAM). (x) Rough Terrain Hydraulic Crane of 20T with
longer Boom section.
(ii) Packaged, Ductable Splits and Chiller Package
with eco-friendly refrigerant. (xi) Cost effective Forklift truck of 10T capacity.

(iii) Development of factory built ammonia 3. Imported Technology

re-circulation system for quick freezing of
No technology has been imported during the last five
processed food.
years.
(iv) Development of commercial Visi Coolers.
4. Expenditure on R & D
(v) Development of Scooping Freezers with curved
glass. The expenditure on R&D activities for the year 2009–10
was Rs.409.45 lakhs (including capital expenditure
(vi) Development of electronic controls and
thermostat to reduce energy consumptions. of Rs.11.05 lakhs). In relation to the turnover of own
manufactured products, the R&D expenditure was
(vii) Development of Eutectic Freezer.
0.95% of the turnover.
(viii) Development of counter balanced stacker
5. Energy Conservation
capacity of 1.2 T.

(ix) Development of 6-8 T tow truck. The Company is conscious of the need for energy
conservation and continues to explore the possibilities
(x) Development of Screening Plant with hydraulic
technology. of reducing energy consumption in the Office premises
and Plants. Some of the measures taken are:
2. Product and processes developed through in-house
(i) Improved performance testing method of units
technology
with reduced fuel consumption.
(i) Test facility for Chiller Packages established at (ii) Usage of inverter based machines to reduce
Dadra and Pantnagar Plants. power consumption.

(ii) Chiller Package and Ductable Split for offshore (iii) 750 KVA DG Sets to optimise diesel
applications. consumption.

(iv) Provision of natural roof lighting in factory

(iii) Ultra low temperature Refrigeration Systems.
building to reduce energy consumption.
(iv) 700L Visi Coolers with eco-friendly refrigerant (v) Central air compressors of low capacity
and PU Foaming system. and Portable air compressors for individual
applications.
(v) 320L and 405L slant type Scooping Freezers.
(vi) Low capacity individual lighting fixture in shop
(vi) 600L Chest Freezer. floor units instead of high capacity bay-light.

(vii) Eutectic Freezers in 320L capacity for rural (vii) Use of CFL lighting in all offices and shop floor
markets. areas.

9
VOLTAS
Annual Report 2009-2010

MANAGEMENT DISCUSSION AND ANALYSIS

OVERVIEW ELECTRO-MECHANICAL PROJECTS AND SERVICES

1. The Company continued its journey on the path of growth,
and took significant steps to ensure long-term sustainability in
the face of risks and uncertainties in the economic environment.
The Company has now crossed significant milestones in terms
of Consolidated Profit of Rs.500 crores and Consolidated Net
Worth of Rs.1000 crores. Over the last few years, the Company
has significantly deleveraged its Balance Sheet.
The analysis below is on Standalone Voltas performance and the
performance of Company’s Subsidiaries and Joint Ventures are
analysed separately.
Voltas’ standalone operating profits have grown 747% over
a period of last 5 years.
4. The domestic market for HVAC (Heating Ventilation & Air
Conditioning) has shown signs of recovery during the review
period. However, the size of the market has not reverted to
the pre-downturn levels. The Building Environment segment
has seen a slowdown in projects for commercial buildings,
due to scarcity of funds available to builders. The Healthcare
sector, however, supported by government investments,
has shown rapid growth and presents a positive outlook.
In the Industrial sector there has been a delay in planned
procurement by the power plants and the backlog is likely to
spill into next year.

5. Despite these constraints, the Order book of domestic

449 Electro-mechanical business has grown by 21% over the
335 previous year, due to inroads into MEP business, focus on
278 urban infrastructure projects, forays into multi-disciplinary
4565 industrial projects and repeat orders from existing customers.
155
4070 45% of the total order booking was from repeat customers.
118
53 3086
2451 6. The Company secured MEP orders for two international
1904 airport modernization projects initiated during 2009-10,
1441
reinforcing its reputation in the Airport sector. The first
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 order was from ITD-ITDCEM for Netaji Subhas Chandra Bose
Revenues Operating Profit International Airport (Kolkata) and the second was from
CCCL-HPI for Chennai International Airport.
2. The Company sustained its focus on shaping its offerings
of projects, services and products to the prevailing market 7. Redefined market segmentation and clear customer
circumstances and challenges. There have also been significant focus has resulted in development and progress in all
measures to optimize costs and streamline processes so as the segments addressed by the Company. The Building
to better leverage opportunities in the expected economic
Environment and Urban Infrastructure segments together
resurgence.
contributed to 70% share of order bookings. Major orders
3. The business segments of the Company are: included Sofitel (Accor Group) Hotel in Mumbai, Le Meredien
‘A’ - Electro-mechanical Projects and Services Hotels in Coimbatore, ESIC Hospital in New Delhi, TATA
‘B’ - Engineering Products and Services Medical Trust in Kolkata, Army Hospitals in Delhi, Amanora
‘C’ - Unitary Cooling Products for Comfort and Mall in Pune, Infiniti Mall and Neptune Mall in Mumbai,
Commercial Use Ascendas Phase-3 at Siruseri and TCS Phase-2 at Hyderabad.

8. The Company leveraged its strengths to address the

rapidly growing demand in the Power and Metal industries.
With its diversified offerings, the Company secured a
‘A’ 2762 (61%)
‘B’ 468 (10%) breakthrough order from Maithon Power for Low Pressure
piping and Electrical Balance of Plant (EBOP) for Primary
Water systems. This was further augmented by a major order
from Tata Steel for Low Pressure piping works. These orders
‘C’ 1312 (29%) demonstrate the capabilities of the Company in Industrial,
Mechanical and Electrical services.

10
9. The Company was awarded a specialty multi-disciplinary
project from Mahindra Engine Research & Development
Centre, Chennai, the first of its kind to involve twelve
specialized systems, including HVAC, Electrical, Compressed
air, Fire detection (gas detection) and fire protection (water
mist), Building Management Systems, Public Address system
and Fuel supply. Additionally, the Company was entrusted
with the responsibility for Project Management Consultancy
of acoustics in the engine test room, as well as test cell and
fan analytical gases.
10. Repeat orders were secured from Maruti for its facilities
at Mundra, Manesar and Bangalore. The scope of work
included specialized mechanical and electrical services
beyond the conventional HVAC systems.
11. The Company maintained commendable track record of
on-time progress in fast track projects, by executing 9 out of
the 13 stadiums being built for the Commonwealth Games,
New Delhi, as well as 4 training venues. The pace of work was
maintained against difficult working conditions, including
working at great heights and met the highest technical
requirements, such as low velocity of air.
12. The Company established integrated state-of-the-
art testing facilities for its Energy Conservation Building
Code (ECBC)/ASHRAE 90.1 compliant standard range of
chillers, manufactured at its Dadra plant. The manufacturing
capabilities received a new impetus with the successful
commissioning of indigenously developed co-generation
Vapour Absorption Machines (VAM) of large capacity
(1450 TR) for Thyagaraja Stadium in New Delhi. The VAMs are
also being exported to countries like Indonesia and Saudi
Arabia despite global competition, testifying to the quality
of the Company’s manufacturing capabilities in high-end
engineering products.
13. In the low-temperature refrigeration area, the Company
has established its capabilities in design, manufacture and
commissioning of chiller packages for specialized purposes,
as demonstrated by the successful commissioning of
ultra-low temperature chiller packages for BARC at -75º C, and
Rallis’ fertilizer and petrochemicals plant at -65º C, as well as
Jayashree Chemicals’ chlorine liquefaction plant (200 MTPA).
14. The Company also participated in execution of a
prestigious project based on a technical paper published
by BARC Scientific Division, to enhance the shelf life of
11
onions to 6 months. While the irradiation requirements were
handled by BARC, the process cooling was undertaken by
the Company – an instance of new area in which the trust of
clients has been won and vindicated.
15. There has been significant growth in the Variable
Refrigerant Flow (VRF) segment. VRF systems engineered
by the Company contributed significantly to the triumph of
projects which won the 4 most prestigious awards conferred
at the Emerson Cup 2009 for India and SE Asia.
16. The Company’s careful selection of geographies and
customers sustained its thrust in international Electro-
mechanical business through a very difficult business
environment. Profitability of the International Operations
improved very significantly on the back of good quality order
book. The Company commissioned several large projects
during the year. These included two prestigious projects in
GCC, which were delivered within their timeframes, namely
the Burj Khalifa (Dubai), the world’s tallest man-made
structure, and the Yas Marina F1 Circuit (Abu Dhabi), which
the Company completed and delivered well in time for the
UAE’s first Grand Prix event, earning an unprecedented letter
of appreciation from the Chairman of Aldar Properties, the
Developers. The Company also completed the large District
Cooling Plant in Dubai International Financial Centre. This
along with the critical District Cooling Plant at Singapore
establishes the Company firmly in setting up District Cooling
facilities in different geographies.
17. The economic recession last year resulted in a slowdown
in certain geographies in which the Company operates,
such as Dubai and Singapore. With the property bubble
having burst in Dubai, a more conservative attitude towards
investments now prevails, with new rules governing public
debt levels. These are motivated by greater governmental
concerns about the sustainability of their spending and an
awareness of risks stemming from excessive leverage in
real estate companies. In spite of the economic adversity,
the Company demonstrated its fundamental strength by
securing new international projects of Rs. 898 crores during
the year under review.
18. The Company’s international Electro-Mechanical
business successfully re-certified its Quality Management
System for the ISO 9001: 2000 standard and renewed its
Business Excellence drive by participating in the Group’s
TBEM External Assessment. The Company improved its score
VOLTAS
Annual Report 2009-2010
from 317 to 453 on a 1000 point scale, thereby winning a
‘Serious Adoption Award’, reflecting the positive outcome of
various improvement initiatives.
19. Rohini Industrial Electricals Limited, which is engaged
in Industrial Electrical Projects and where the Company
holds 67% shareholding, performed satisfactorily during the
year with a turnover of Rs.214 crores against Rs.191 crores in
the previous year. The operating profit of the Company was
lower at Rs.14 crores against Rs.17 crores last year, due to
higher input costs. There was also an increase in employee
cost and sales expenses. Benefits from some of these costs
are likely to accrue in the coming years. Rohini has a robust
Order Book and this should augur well for the future.
20. Universal Voltas Limited (UVL), Abu Dhabi, a Joint
Venture company based in Abu Dhabi with Voltas
shareholding of 49% and engaged in execution of small to
medium size Electro Mechanical Projects and Operation
& Maintenance activities performed well during the year.
The turnover of UVL increased from Rs.155 crores to Rs.188
crores and the operating profit increased from Rs.13 crores to
Rs.20 crores. As a result of the slowdown in UAE, the
performance of UVL is likely to face some pressures in the
ensuing year.
21. Weathermaker Limited, based in Jebel Ali Free Zone
in Dubai, which is engaged in manufacturing of specialized
ducts, diffusers, etc., faced slow down due to the prevailing
conditions in Dubai region and its turnover dropped from Rs.48
crores to Rs.43 crores. However, due to lower inputs costs and
distributions costs, its operating profit was higher at Rs.6 crores
as compared to Rs.5 crores last year. Weathermaker Limited is
also likely to face some pressures in the ensuing year.
22. Other Subsidiary and Joint Ventures companies in this
segment, namely Saudi Ensas Company for Engineering Services
WLL, KSA, Naba Diganta Water Management Limited, Kolkatta,
Universal Weathermaker Limited, Abu Dhabi, are relatively small
and their contribution is not significant as of now.
23. The Company’s overall carry forward Order Book for
the Electro-mechanical Projects and Services segment was
Rs.4227 cores, as at 31st March, 2010.
ENGINEERING PRODUCTS AND SERVICES
24. The Indian textile industry witnessed growth in the
second half of 2009-10 which led to higher investment in
12
machinery, in both spinning and post-spinning segments like
fabric forming, processing and finishing. The order booking
and despatches for spinning machinery increased by 25%
over the previous year, driven by domestic demand as also
strong export of yarn and garments. The Company was also
able to consolidate its relationship with Thies GmbH for
dyeing machinery and booked orders of over Euro 10 million.
25. The Indian construction equipment industry witnessed
growth in the second half of 2009-10, led by higher
investments in infrastructure and road projects. The iron
ore mining segment also picked up post-September 2009
due to the increase in exports to China and other countries.
This led to higher off-take of the Company’s crushing and
screening equipment and crawler cranes. The mining of coal,
iron ore and limestone continued to attract investment in
large projects, which led to sustained demand for mining
equipment, spare parts and services. The Company was
able to successfully execute and commission an order of
Rs.100 crores for large capacity mining excavators of 34 cu.m.
capacity from Hindustan Zinc Limited. The revenues from
sale of parts and maintenance contract services increased
due to ongoing contracts for various mining equipment.
26. The Indian materials handling equipment industry
continued to see a downturn in 2009-10, without any pick
up in investments in manufacturing capacity by customers.
Though there was some improvement in the fourth quarter,
forklift and crane production and sales for the year declined
by 11% and 70%, respectively. The Company maintained
its market share for forklifts and increased its sales of
warehousing equipment, parts and service.
27. The down turn was a good opportunity for relooking
at the cost structure and improving internal efficiencies. This
will help in long term sustainability of the operations.
UNITARY COOLING PRODUCTS FOR COMFORT AND
COMMERCIAL USE
28. The Indian air conditioner industry witnessed growth
of 25% during the year under review, reflecting the nation’s
economic recovery from the recessive downturn of the
previous year. Two significant trends were in evidence: the
industry’s movement towards energy-efficient ‘Star’ rated
products, and the higher growth rate in split ACs compared
to window ACs.
29. In this climate of renewal, the Company’s Unitary
Cooling Products Business registered robust growth of 30%
in volume, well above the industry average. The split AC
segment was the major contributor with 38% growth, while
window ACs registered 17% growth. To further advance
its lead, the Company made significant efforts to extend
its reach in semi-urban and rural markets, by expanding its
sales and service network from 3700 to over 4600 dealers,
distributors and retailers, through a focused channel
expansion program. In addition, an organized retail vertical
has been set up to cater to the demands of these growing
demographic strata.
30. The Company also sustained its developmental focus by
introducing an extended range of ‘Star’ rated products. The
objective was to cater to the diversity of priorities, preferences,
income groups and aesthetic tastes, while maintaining key
differentials and attributes, such as the new eco-system
technology, self-diagnosis, auto-louver step adjustment,
optimized cross-flow vane and other intelligent features.
31. The new advertising platform of ‘Sensible Cooling’
has been well appreciated, with its thrust on educating the
consumer on optimal usage of air conditioners. Following its
pioneering launch of energy-efficient air conditioners, the
Company continued to hold the high ground in this market.
Brand recall reached an all-time peak and the Company’s
overall share in the room air conditioner market has been
sustained at 16.5%.
32. The Company’s increased focus on commercial
refrigeration, through a separate sales vertical, continues to
show good results, with robust growth of 46%, despite the
economic slowdown. The water cooler business registered
steady growth of 15%, while water dispensers evidenced
growth of 13%, thus sustaining market leadership.
33. The Company has successfully adopted a flexible
business model with a judicious mix of outsourcing and
in-house manufacturing, which has helped maintain a low-
cost and lean operating structure. Operations at the Pantnagar
manufacturing facility of the Company’s wholly-owned
subsidiary (UCPL) have stabilized, with the facility producing in
excess of 2,00,000 units in the year under review.
34. Universal Comfort Products Limited (UCPL), the
manufacturing arm for this segment, has done very
well during the year. The loading of the plant improved
13
substantially due to localization as mentioned above and
it contributed Net Profit of Rs.13 crores against a loss of
Rs.21 crores in the previous year. Some of the loss in the
previous year arose from closure of its Dadra Plant and
consequent impairment of assets.
35. Lalbuksh Voltas Limited, a joint venture company based
in the Sultanate of Oman dealing in horticulture, water
management and purification, etc., and included in Others
Segment, continued to do very well and achieved a turnover
of Rs.69 crores as against Rs.58 crores in the previous year. Its
operating profit increased significantly from Rs.9 crores in the
previous year to Rs.19 crores.
OPPORTUNITIES AND OUTLOOK
ELECTRO-MECHANICAL PROJECTS AND SERVICES
36. With the economic recovery expected to gain
momentum in 2010-11, domestic markets are likely to
attract new or renewed investment and growth. Those
which hold significant opportunities for the Company
include healthcare, which would attract both governmental
and private investment in hospitals; urban infrastructure,
specifically metro rail transport; airports and ports; power,
steel and manufacturing sectors; and educational/research
institutions. The Company is well placed to seize these
opportunities with its proven integrated capabilities in MEP
contracting, as well as in electrical works through Rohini
Industrial Electricals Limited, its subsidiary company. The year
on year improvement in the value and quality of the order
book are good indicators of the strength of the Company for
future growth.
37. New opportunities are also being opened up by the
growing industrial focus on energy-efficiency, reduction of
carbon footprint, carbon credit trading and ‘Green buildings’
in the commercial sector, as mandated by the government’s
Bureau of Energy Efficiency. With its established record in this
area, the Company has a strong competitive edge.
38. The principal driver of the GCC economies being oil
revenue, the sharp drop in oil prices early in the year had
resulted in some of the Governments adopting a cautious
approach towards their spending. Oil prices picked up
during the latter half of the year 2009-10 and currently stand
at about USD 70 a barrel vis-à-vis USD 40 a barrel at the
start of the year, indicating that an economic recovery was
under way. Furthermore, Governments of GCC countries are
VOLTAS
Annual Report 2009-2010
committed to invest in developing infrastructure, education
and healthcare over the next few years, especially, Abu Dhabi
(with its large share of oil reserves), Qatar (with plentiful
natural gas reserves) and Saudi Arabia (which has the largest
economy within GCC). These positive factors signify good
prospects for the Company’s MEP services.
39. The Company is in the process of restructuring its
international operations to expand its geographical presence
and enhance focus on projects in industry, infrastructure and oil
& gas, which have greater assurance of Government spending
in the attempt to pull economies out of the recession.
ENGINEERING PRODUCTS AND SERVICES
40. It is expected that investments in capital goods and
engineering products will be sustained in the next few years
as the Indian economy regains its growth path, including
infrastructure projects such as airports, ports, power
and roads and manufacturing industries such as textiles.
This would provide good opportunity and demand for
engineering products and services of the Company in the
segments of mining & construction equipment, materials
handling equipment and textile machinery.
41. The Company has pending orders for large mining
equipment from coal projects as well as on-going parts and
service contracts which will sustain the revenues in future.
Demand for crushing and screening equipment and cranes is
also expected to be strong for infrastructure and road projects.
42. The market for materials handling equipment is
beginning to revive, with growth and increased investments
in manufacturing sectors such as two-wheelers, automobiles,
general engineering and power. These are expected to lead
to additional requirement in logistics, warehousing and
materials handling, driving the demand for forklifts, cranes
and warehousing equipment.
43. New projects are now being planned in the spinning
sector, yielding good demand for spinning machinery and
services. The post-spinning sector, particularly processing
and finishing, also has a number of projects on the anvil
which should sustain demand.
UNITARY COOLING PRODUCTS FOR COMFORT AND
COMMERCIAL USE
44. The domestic room air conditioner industry is
expected to grow by around 25% in the year ahead, driven
14
by its presently low penetration levels, coupled with rising
middle-class aspirations, growth in disposable incomes and
the increasing impact of climate change. Better availability
of reliable power supply and lower cost of running air
conditioners with energy efficient machines are also likely
to accelerate the pace of growth in demand. The Company
plans to seize these opportunities, through a focused channel
expansion effort in B and C class towns and by creating a
product mix suited to the requirements of the emerging
customer base.
45. The commercial refrigeration segment is expected
to continue to grow at 35%, driven by a growing demand-
supply gap as well as the need for quality infrastructure in
user industries such as retail, dairy, ice cream and brewery.
With its high-quality products and superior on-time delivery
and service, the Company is well placed to maintain its
leadership position.
THREATS
ELECTRO-MECHANICAL PROJECTS AND SERVICES
46. With the Company’s increased exposure in the
industrial and infrastructural sectors, any delays in the
planned execution of announced projects could impact the
business projections.
47. Attracted by the growing Indian economy, many
multinational companies are considering entry into the
MEP sector. In addition, some of the main contractors are
developing in-house MEP capabilities and this is expected
to cause competitive pressure for the business and is also
likely to impact the operating margins.
48. The Company’s major markets in UAE could be
adversely affected by debt restructuring and the difficulties
of Dubai corporates in repaying existing loans.
49. A major risk could arise in the event of a global
slowdown and resultant drop in oil prices/revenues which
could impact the GCC Governments’ ability to drive growth.
50. The demographic mix of the labour workforce within the
GCC countries includes a large proportion of expatriate workers,
which could be a cause of concern and unrest in countries like
Saudi Arabia and Bahrain which are now witnessing higher
unemployment amongst the indigenous population.
51. The Company’s overseas revenues are directly proposition for the customer. Further, since the Company
impacted by fluctuations in currency rates, since its does not offer the full range of consumer durables, it has
Middle East earnings are pegged to the USD. Additionally, lower bargaining power in organized retail stores, which
on both domestic and international fronts, there is the are now becoming an increasingly important distribution
impact of volatility in material and commodity costs. channel and whose numbers are growing significantly.
These may be linked to currencies of countries from
Inventory planning is another major challenge since
where the Company source materials and products, such
over the last two years, either the markets have slowed
as Europe, Japan and China, or may arise from changing
down suddenly resulting into large inventories or grown
market realities. The challenge for the Company is to
at unprecedented rate resulting in need for procuring
protect its profitability in this uncertain environment,
products at higher cost, pressuring the margins.
since most of its international projects are high value
Fluctuating value of Indian Rupee vis-à-vis US Dollars is
and long gestation lump-sum fixed price contracts, while
another factor that can impact the margins.
domestic business too is trending towards that model.
The Company continues to undertake forward booking
FINANCIAL PERFORMANCE - STANDALONE
and hedging in respect of certain currencies, to mitigate
the risk. 55. Financial performance as a measure of operational
performance
ENGINEERING PRODUCTS AND SERVICES
(a) Net Sales and Services (Segment Revenues):
52. The growth in the Indian economy and industry is
attracting global and domestic manufacturers to set up Rs. in crores

operations in India, leading to increased competition

2009-10 2008-09 Change Change %
in engineering products and services. This could be a
major issue for textile machinery, mining & construction Segment-A (Electro- 2762 2539 223 9%
equipment and materials handling equipment. To counter mechanical Projects and
Services)
these risks, the Company is focusing on improvement in
its products and service offerings. Segment-B (Engineering 468 542 (-) 74 (-) 14%
Products and Services)
53. Other potentially adverse factors relate to increase
in input costs of steel and other raw materials and Segment-C (Unitary Cooling 1312 912 400 44%
Products for Comfort and
fluctuations in foreign exchange rates. These could Commercial Use)
impact margins for the Company’s own manufactured
and traded products. The Company has set up processes Others - 40 (-) 40 (-) 100%
for cost reduction through value engineering and other
Total 4542 4033 509 13%
initiatives to protect the margins. Global uncertainty
and instability could also adversely affect the domestic
Revenues in Electro Mechanical Projects and Services
investment climate which could have a direct bearing on
Segment grew at a slower pace primarily because of slow
the Engineering Business.
conversion of order book into execution in the Domestic
UNITARY COOLING PRODUCTS FOR COMFORT AND Projects Business. Revenues of Engineering Products
COMMERCIAL USE and Services Segment were impacted due to lower
54. While earlier the Company had differentiated its off-take in Materials Handling business arising from lower
products on the energy-efficiency platform, energy capital formation. In Mining and Construction business
labeling has now become mandatory. Consequently, in also, revenues were lower though they were much more
future, there will be limited product differentiation across profitable. Revenue from ‘Others’ in 2008-09 was primarily
brands. To succeed in the market place, the business has from Chemicals Trading business, which was sold at the
to once again create an endearing and enduring value end of March 2009.

15
VOLTAS
Annual Report 2009-2010

(b) Other Income: A large part of this cost is contributed by Unitary Cooling
Products Business. Due to the increase in volumes in this
Rs. in crores
business and restructuring of the dealers’ commissions,
2009-10 2008-09 Change Change % there was an increase against which, there was more than
Other Income 76 94 (-) 18 (-) 19% commensurate increase in gross margins.

Other Income comprises rental income, profit on redemption (f ) Other Expenses:

of mutual funds/sale of non-trade current investments,
Rs. in crores
dividend income from investments, interest income,
miscellaneous income and foreign exchange gain, if any. 2009-10 2008-09 Change Change %
Other Income in previous year included foreign exchange Other Expenses 141 151 (-) 10 (-) 7%
gain of Rs.18 crores on account of conversion of net
foreign assets, against which in the year 2009-10, there is a Other Expenses includes service maintenance charges, selling
loss. Similarly, profit on redemption of mutual funds was expenses, outside service/contract labour charges, staff
Rs.0.03 crore only, as compared to Rs.7 crores in 2008-09 from selection expenses, bank charges, C&F charges, moving and
redemption of units of Fixed Maturity Plans (FMPs) of Mutual
shifting expenses, cash discounts, royalty and commission
Funds. On the other hand, rental income was higher by
to Directors. While other expenses in domestic business had
Rs.7 crores compared to the previous year.
increased due to cash discounts, in international business, it
(c) Exceptional Items: had reduced due to lower staff selection/visa expenses.

Rs. in crores (g) Profitability:

2009-10 2008-09 Change Change % Rs. in crores

Exceptional Items 36 32 4 13% 2009-10 2008-09 Change Change %

Profit Before Tax 485 367 118 32%
Exceptional Items primarily comprise profit on sale of
Profit After Tax (Net Profit) 344 252 92 36%
properties and reversal of contingency provision, which is no
longer required. Overall increase in profits attributed to much better
results achieved in International Projects business,
(d) Staff Expenses:
improved performance of Mining and Construction and
Rs. in crores Textile Machinery businesses and significantly higher
volumes coupled with increased local manufacturing
2009-10 2008-09 Change Change %
in Unitary Cooling Products business. Improvement in
Staff Expenses 487 429 58 14% internal efficiencies also played a significant role in higher
profitability. Relatively, higher increase in Post tax profit is
Staff Expenses comprise salary, wages, bonus, Company’s
a result of finalization of certain appeals in favour of the
contribution to PF and other funds, retiring gratuity and welfare
expenses. The same are higher due to increase in manpower Company resulting in write back of Provision for Taxation
for overseas projects on account of new projects like Sidra relating to the previous years.
Medical Research Centre and normal adjustments arising
56. FINANCIAL POSITION - STANDALONE
from increments. On the other hand, due to rationalization of
structures in the domestic businesses, there was a reduction in (i) Secured Loans:
staff numbers and staff cost was lower by Rs. 11 crores.
Rs. in crores

(e) Commission other than to Sole Selling Agents: 2009-10 2008-09 Change Change %
Rs. in crores Secured Loans 19 128 (-) 109 (-) 85%

2009-10 2008-09 Change Change % Company’s judicious management of treasury operations

Commission other than to 104 50 54 108% and better management of working capital resulted in much
Sole Selling Agents
lower borrowings.

16
(ii) Fixed Assets: Some large billings towards the end of the year on several
Rs. in crores international projects resulted in higher receivables. The
2009-10 2008-09 Change Change % pressure on domestic project receivables continues but is
Fixed Assets after 175 173 2 1% not a matter of major concern.
Depreciation - (Net)
(vi) Cash and Bank Balances:
There was marginal increase in the Net Fixed Assets of the
Rs. in crores
Company due to incremental investment in buildings, plant
2009-10 2008-09 Change Change %
and machinery and in software. The Company undertook
Cash and Bank balances 403 400 3 1%
several initiatives for improving Information Technology
systems which also resulted in additional capital expenditure.
Cash and Bank balances include over Rs.200 crores in fixed
(iii) Investments: deposits against advances received from customers in the
Rs. in crores International Projects Business.
2009-10 2008-09 Change Change % (vii) Loans and Advances:
Rs. in crores
t
Long Term Investments:

- Trade and other Investments 29 31 (-) 2 (-) 6% 2009-10 2008-09 Change Change %
Loans and Advances (Net) 238 225 13 6%
- Investment in subsidiaries 119 95 24 25%
Total Long Term Investments 148 126 22 17% The increase is primarily due to advances given to
t
Current Investments: subsidiary companies including share application money of
- Units of Mutual Funds 203 121 82 68% Rs.23 crores. The incremental advances carry interest.

During 2009-10, the Company increased its shareholding (viii) Current Liabilities and Provisions:
Rs. in crores
from 51% to 67.33% in the equity capital of Rohini Industrial
Electricals Limited, a subsidiary company at a cost of 2009-10 2008-09 Change Change %
Current Liabilities 1824 1824 Nil Nil
Rs.24 crores. Company’s investment of cash surpluses in
Provisions 246 242 4 2%
liquid Mutual Funds increased by Rs.82 crores compared to
the previous year. Despite the increase in business volumes, the Company has
ensured that the obligations towards vendors, sub-contractors
(iv) Inventories: and others were met and the cash generation, which was
Rs. in crores very good at the Company level, was not at the cost of those
2009-10 2008-09 Change Change %
dependent upon and dealing with the Company.

Raw materials, components FINANCIAL PERFORMANCE - CONSOLIDATED

and stores 72 79 (-) 7 (-) 9%
57. Financial performance as a measure of operational
Work-in progress (Net) 658 686 (-) 28 (-) 4%
performance
Finished goods 332 287 45 16%
(a) Net Sales and Services (Segment Revenues):
There was an increase in the inventory of finished goods Rs. in crores
(air-conditioners) of Unitary Products business in anticipation 2009-10 2008-09 Change Change %
of a good pick-up in demand in the peak summer season of Segment-A (Electro- 3113 2760 353 13%
mechanical Projects and
April to June 2010. Services)
Segment-B (Engineering 468 542 (-) 74 (-) 14%
(v) Sundry Debtors: Products and Services)
Rs. in crores Segment-C (Unitary Cooling 1186 920 266 29%
Products for Comfort and
2009-10 2008-09 Change Change % Commercial Use)
Others 39 104 (-) 65 (-) 63%
Net Debtors 847 817 30 4% Total 4806 4326 480 11%

17
VOLTAS
Annual Report 2009-2010
The major contributors in Consolidated Revenues were
Rohini Industrial Electricals Limited (Rohini), Universal Voltas
LLC and Weathermaker Limited in Segment ‘A’ and Universal
Comfort Products Limited (UCPL) in Segment ‘C’. Revenue
from ‘Others’ primarily comprises Lalbuksh Voltas Engineering
Services and Trading LLC (Lalvol).
(b) Profitability:
Rs. in crores
2009-10 2008-09 Change Change %
Profit Before Tax 532 372 160
Profit After Tax (Net Profit) 385 255 130
The major contributors were Rohini, UCPL, Lalvol and
Universal Voltas LLC.
LIQUIDITY AND CAPITAL RESOURCES
58. The Company accords highest priority to cash
generation and cash management. Capital engagement in
the businesses is reviewed regularly and is a focus area. The
Company has brought down floats, reduced borrowings
across the group companies and has increased investment in
liquid instruments, which stand at over Rs.200 crores. Against
the net worth of around Rs.1000 crores, the cash and bank
balances and liquid investments amount to Rs.600 crores.
59. Cash generation during the year from Operating
activities before tax, almost equaled the Operating Profit. The
low leverage of the Balance Sheet and high liquidity form a
strong foundation for the future growth and the Company is
placed in a uniquely competitive position.
RISK AND CONCERNS
60. Risk management is a part of the strategic business
planning and reviews and has assumed increased
importance in the volatile times. The Company was able
to navigate successfully through the volatile business
environment and has been able to generate higher profits
year after year because of the strong risk management
practices.
61. In the competitive environment, data security is
important and has been a focus area. Regular drills have
been conducted to ensure availability of backups at all times.
62. Liquidity and exchange risks have also received
increased attention during the year. In both these areas, the
Company has adopted conservative measures to ensure
that the risk mitigation exercises do not result in increase in
indirect exposures. In foreign exchange management, direct-
forwards is the most preferred option. Company’s liquid
resources have also been invested prudently, so as to avoid
exposure to high risk/high return avenues. In the Businesses,
receivables and inventories have been constantly under
review and this has resulted into bringing down the levels,
except in project businesses where the receivables have got
stretched but are within tolerance limits
63. Costs are also recognized as a risk on sustainability of
43%
the businesses and have generally been treated on par with
51%
investments, so that cost/return equation is not ignored.
64. Increasing competition, escalating input costs, inflation
and execution of technically challenging projects are some of the
other risks which have assumed significance in the recent past
and they are receiving close attention from the Management.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
65. An independent Internal Audit function is an important
element of the Company’s internal control system. The
Internal Auditors conduct audits of various departments
based on an annual risk-based internal audit plan covering
key areas of operations, including the overseas operations.
The annual internal audit plan and the internal audit reports
are also shared with the Statutory Auditors. The Department
reviews and evaluates the adequacy and effectiveness of
internal controls, ensuring adherence to operating guidelines
and systems, recommending improvements for monitoring
and strengthening economy and efficiency of operations and
ensuring reliability of financial and operational information.
The Company has put in place a Risk Assessment and
Mitigation process across all its business operations, which is
periodically reviewed by the Management.
66. The Company’s in-house Internal Audit Department
comprises qualified CAs and CISAs. To harness skill sets in
the areas of indirect taxation, logistics and procurement, the
Company also utilises the services of M/s Mahajan & Aibara, a
firm of Chartered Accountants, as a co-partner for internal audit.
67. Significant audit findings and suggestions along with
the ‘Action Taken Reports’ are reported to the Board Audit
Committee, which consists of three Independent Directors.
The Board Audit Committee monitors and reviews the
significant internal audit observations, compliance with
18
accounting standards, risk management and control systems,
profitability and risk ratings of overseas contracts and the
status of outstandings and inventory levels.
HUMAN RELATIONS
68. The Company was successful in meeting the challenges
and realizing the opportunities of its business environment
during the year under review, with the support of its
dedicated, competent and committed employees. With
the announcement of the new top leadership team, the
Company is well on its way towards building further on the
solid foundations already in place.
69. Human Resources initiatives focused on capability and
capacity building. The Company continued to implement
best practices and innovative initiatives. Against competitive
pressures in acquisition and retention of talent, the Company
successfully recruited high-quality personnel from premier
institutes. Another major initiative was the Voltas Work Level
Study carried out with the help of the Tata Group HR team.
This study focused on an analysis of jobs using scientific
techniques with a view to enabling flatter structures and
faster decision-making.
70. The Company conducted its second Employee
Engagement Survey covering all employees, including those
on contract, overseas. The results indicated improvement
in engagement. Continuing the focus on further improving
Employee Engagement and ushering in a proactive
work culture, several initiatives are planned for the year
ahead. Employee Contact Programs will continue to play
an important part in obtaining valuable feedback and
implementing appropriate action plans.
71. With the objective of top level leadership development,
a specially designed Strategic Leadership program was
conducted at the TMTC. This is to be followed up with
suitable programs for further reinforcement. The Company
also carried out rigorous assessment to identify a group of
Fast Trackers from amongst the young managers. To continue
its regular training focus on leadership development and
managerial effectiveness, the Company conducted a number
of internal and external training workshops, courses and
seminars. Induction programmes for new recruits at all levels
were taken up regularly. The feedback from the training
programmes has been very encouraging.
19
72. However, as the business climate improves, the
Company is likely to face certain challenges on the human
resources front. On the one hand, there will be increased
demand for skilled people for supporting the growth
aspirations in the Company’s businesses. On the other
hand, there will be increasing competition amongst various
industries for attracting talent. Before the advent of the
global slowdown, availability of experienced and skilled
resources was a big challenge and the Indian economy
may be heading for a similar situation again. The ensuing
competition for a limited talent pool could therefore lead
to inflation in salaries and the Company’s employee costs
could rise substantially. The expansion of the Company’s
businesses into new verticals, new countries and markets
segments will also call for specific skills, experience and
management bandwidth which may not be readily available.
While contending with these issues of a scarce talent pipeline
and rising employee cost, the Company will also need to
ensure high employee engagement, training and retention.
The human resource challenge is therefore a priority area for
the Corporate Management and the Company is working
aggressively on strengthening its organisation structure, as
also the processes for recruitment, training, compensation
benchmarking and retention. The Company also periodically
reviews re-engineering of business processes (including
outsourcing, where advantageous) in order to increase its
overall human resource capability, to meet the aspiration for
rapid growth.
73. Industrial relations continued to remain cordial.
74. The total staff strength as on 31st March 2010 was
8608, including 5173 contract staff, primarily for overseas
projects.
CAUTIONARY STATEMENT
75. Statements in the Management Discussion and Analysis
describing the Company’s objectives, projections, estimates
and expectations may be ‘forward-looking statements’ within
the meaning of applicable securities laws and regulations.
Actual results could differ materially from those expressed or
implied. Important factors that could make a difference to the
Company’s operations include economic conditions affecting
demand/supply and price conditions in the domestic and
overseas markets in which the Company operates, changes
in the Government regulations, tax laws and other statutes
and other incidental factors.
VOLTAS
Annual Report 2009-2010
Report on Corporate Governance
1. Company’s philosophy on code of governance
Good Corporate Governance is an integral part of the
Company’s Management and business philosophy.
The Company subscribes fully to the principles and
spirit of good Corporate Governance and embeds the
principles of independence, integrity, accountability and
transparency into the value system driving the Company.
The Board of Directors exercise their fiduciary
responsibilities towards all stakeholders by ensuring
transparency and independence in the decision making
process. The Company has adopted the Tata Business
Excellence Model as a means of driving excellence
and the Balanced Scorecard methodology for tracking
progress on long term strategic goals. The Company has
also adopted the Tata Code of Conduct which serves as a
guide to each employee including the Managing Director,
on the standards of values, ethics and business principles.
The Whistle Blower Policy of the Company provides a
mechanism for the employees to approach the Chairman
of Board Audit Committee/Ethics Counsellor and disclose
information that may evidence unethical or improper
activity concerning the Company.
2. Board of Directors
(a) Composition
The present Board comprises 10 members: 9 Non-
Executive Directors (NEDs) and the Managing
Director. Of the 9 NEDs, 5 are Independent Directors.
All the Directors of the Company are liable to retire by
rotation and there is no permanent director.
The Company has a Non-Executive Chairman and the
number of Independent Directors is 50% of the total
number of Directors. The Company is in compliance
with the requirements relating to the composition
of Board of Directors, in line with Clause 49 of the
Listing Agreement.
(b) Non-Executive Directors’ compensation and
disclosures
The Sitting fees paid to Non-Executive Directors,
including Independent Directors for attending
Board/Committee Meetings are within the limits
prescribed under the Companies Act, 1956 (the Act).
The shareholders have at the 55th Annual General
Meeting (AGM) held on 10th August, 2009 passed the
Special Resolution approving payment of commission
to Non-Executive Directors not exceeding 1% per
annum of the net profits of the Company, to be
calculated in accordance with the provisions of the Act.
20
The aforesaid Resolution was passed for a period of
five financial years, commencing from 1st April, 2010.
(c) Other provisions as to Board and Committees
During the year 2009-10, eight Board Meetings were
held on the following dates and the gap between
two consecutive Board Meetings, did not exceed the
statutory requirement of 4 months.
21st April, 2009, 29th May, 2009, 30th July, 2009,
17th September, 2009, 29th October, 2009,
21st December, 2009, 25th January, 2010 and
18th March, 2010.
The Annual Calendar of Board Meetings is agreed
upon at the beginning of the year and the Notice
for Board Meetings and detailed agenda papers
are circulated to all the Directors well in advance to
enable them to attend and take informed decisions
at the Meetings. The information as required under
Annexure - IA to Clause 49 of the Listing Agreement
is made available to the Board. In addition, all
proposals of investments, divestments and
decisions in respect of properties of the Company,
execution of overseas projects and credit facilities
in respect thereof are placed before the Board for its
consideration and appropriate decision in the matter.
The annual budgets – Revenue, Capital as well as
the Divisional Budgets/Strategic Business Plans are
presented in detail to the Directors and their valuable
inputs/suggestions are taken. Similarly, actions
in respect of suggestions made/decisions taken
at Board/Board Audit Committee Meetings are
reported and reviewed by the Directors, periodically.
Considerable time is spent by the Directors on
discussions and deliberations at the Board Meetings
and their active participation is reflected by the
number of meetings held during the year and
attended by the Directors.
None of the Directors on the Board hold directorship
in more than 15 companies and no Director is a
Member of more than 10 Committees and Chairman
of more than 5 Committees (as specified in Clause
49), across all the companies of which he is a Director.
The necessary disclosures regarding Committee
positions have been made by the Directors.
The Board periodically reviews compliance of all laws
applicable to the Company, based on a certificate
given by the Managing Director including the steps
taken, to rectify instances of non-compliances, if any.
The names and categories of the Directors on the Board, their attendance at Board Meetings during the year and at the
last Annual General Meeting, as also the number of Directorships and Committee Memberships held by them in other
companies (as on the date of the Directors’ Report) are given below:
Name of Directors Category Board Attendance Number of Directorships in Number of Committee
Meetings at the last other public limited companies positions held in other
Attended AGM held on (excluding directorship in public companies#
during 10th August, associations, private/Section 25/
2009-10 2009 foreign companies)
Chairman Member
Mr. Ishaat Hussain Not Independent 8 Yes 14 4 6
(Chairman) Non-Executive
Mr. A. Soni Not Independent 8 Yes 2 - -
(Managing Director) Executive
(upto 22-4-2010)
Mr. Sanjay Johri Not Independent N.A. N.A. 1 - -
(Managing Director) Executive
(w.e.f. 23-4-2010)
Mr. Nasser Munjee Independent 4 Yes 14 4 3
Non-Executive
Mr. N. J. Jhaveri Independent 8 Yes 11 3 4
Non-Executive
Mr. S. D. Kulkarni Independent 2 Yes 3 2 2
(upto 20-9-2009) Non-Executive
Mr. Ravi Kant Not Independent 3 Yes 7 - 1
Non-Executive
Mr. N. D. Khurody Not Independent 7 Yes 7 1 1
Non-Executive
Mr. Noel N. Tata Not Independent 4 Yes 7 - -
Non-Executive
Mr. Jimmy S. Bilimoria Independent 8 Yes 8 4 3
Non-Executive
Mr. S. N. Menon Independent 8 Yes 7 - 3
Non-Executive
Mr. Nani Javeri Independent 3 N.A. 2 - -
(w.e.f. 29-10-2009) Non-Executive

# Comprises Chairmanship/Membership in Board Audit Committee and Shareholders’/Investors’ Grievance Committee.

(d) Code of Conduct 3. Audit Committee

The Board has adopted the Code of Conduct for the
Directors and senior management of the Company
and the same has been posted on the website of
the Company. All the Board members and senior
management of the Company have affirmed
compliance with their respective Code of Conduct
as on 31st March, 2010. A declaration to this effect,
signed by Managing Director of the Company is
annexed hereto. Senior management comprises the
Division/Department/Functional Heads and the CFOs
of the respective business clusters.
(a) Composition, name of Members and Chairman
The Company has a Board Audit Committee
comprising Non-Executive Independent Directors –
Mr. N. J. Jhaveri, Mr. Nasser Munjee and Mr. Jimmy S.
Bilimoria (a Chartered Accountant by qualification).
Mr. S. D. Kulkarni ceased to be a member of Board
Audit Committee upon his retirement on
20th September, 2009. Mr. N. J. Jhaveri is the
Chairman of the Board Audit Committee. All members
of the Board Audit Committee are financially literate
and have relevant finance and/or audit exposure.

21
VOLTAS
Annual Report 2009-2010
The Managing Director, the Executive Vice President
(Finance), the Chief Internal Auditor and the
Statutory Auditors attend the meetings as Invitees.
The Business Heads and other Operating people also
attend the Meetings, when required. The Cost Auditor
attends the meetings at which Cost Audit related
matters are discussed. The Company Secretary acts
as the Secretary of the Board Audit Committee. The
Minutes of the Board Audit Committee Meetings are
circulated and discussed at the Board Meetings.
(b) Meetings and attendance during the year
Eight Board Audit Committee Meetings were
held during the financial year 2009-10 on the
following dates:
28th May, 2009; 9th July, 2009; 30th July, 2009;
17th September, 2009; 29th October, 2009;
25th January, 2010, 4th February, 2010 and
10th March, 2010.
The attendance of each member of the Committee is
given below :
Name of Members No. of Meetings attended
Mr. N. J. Jhaveri 8 statements.
Mr. S. D. Kulkarni 2
Mr. Nasser Munjee 6 (vi)
Mr. Jimmy S. Bilimoria 7
The quorum of Board Audit Committee Meetings
is two members or one-third of the members,
whichever is greater. The Chairman of the Board
Audit Committee attended the last Annual General
Meeting of the Company.
(c) Terms of reference and role of Audit
Committee
The terms of reference, powers and role of Audit
Committee are in accordance with Clause 49 II of the
Listing Agreement with the Stock Exchanges read
with Section 292A of the Companies Act, 1956. The
broad terms of reference includes the following:
Oversight of Company’s financial reporting
process and disclosure of its financial information
to ensure that the financial statement is correct,
sufficient and credible.
Recommending to the Board, the appointment,
reappointment and, if required, the replacement
or removal of the statutory auditor and the
fixation of audit fees.
22
Approval of payment to statutory auditors for
any other services rendered by them.
Reviewing, with the management, the annual
financial statements before submission to the
Board for approval, with particular reference to:
(i) Matters required to be included in the
Directors’ Responsibility Statement
forming part of the Directors’ Report in
terms of clause (2AA) of Section 217 of the
Companies Act, 1956.
(ii) Changes, if any, in accounting policies and
practices and reasons for the same.
(iii) Major accounting entries involving
estimates based on the exercise of
judgement by management.
(iv) Significant adjustments made in the
financial statements arising out of audit
findings.
(v) Compliance with listing and other
legal requirements relating to financial
Disclosure of any related party
transactions.
(vii) Qualifications in the draft Audit Report.
Reviewing, with the management, the quarterly
financial statements before submission to the
Board for approval.
Reviewing, with the management, performance
of statutory, branch and internal auditors,
adequacy of the internal control systems.
Reviewing the adequacy of internal audit
function, including the structure of the internal
audit department, staffing and seniority of the
official heading the department, reporting
structure coverage and frequency of internal
audit.
Discussion with internal auditors on significant
audit findings and follow up thereon.
Reviewing the findings of any internal
investigations by the internal auditors into matters
where there is suspected fraud or irregularity or a
failure of internal control systems of a material
nature and reporting the matter to the Board.
 Discussion with statutory auditors before the 4.
audit commences, about the nature and scope of
audit as well as post-audit discussion to ascertain
any area of concern.
To look into the reasons for substantial
defaults in the payment to the depositors,
debentureholders, shareholders (in case of
non-payment of declared dividends) and
creditors.
To review the functioning of the Whistle Blower
mechanism.
Carrying out any other function as is mentioned
in the terms of reference of the Audit Committee.
The Board Audit Committee also reviews the
following information:
5.
(i) Management Discussion and Analysis of financial
condition and results of operations;
(ii) Related party transactions submitted by
management on quarterly basis;
(iii) Management letters/letters of internal control
weaknesses, if any, issued by the statutory
auditors;
(iv) Internal audit reports relating to internal control
weaknesses including major audit observations;
(v) Appointment, removal and terms of
remuneration of the Chief Internal Auditor and
Branch Auditors;
(vi) Concerns, if any, received under the Code of
Conduct;
(vii) Discussions with Cost Auditor on cost audit
related matters and with overseas branch
auditors;
(viii) Performance of all major on-going projects in
India and Abroad; and
(ix) Financial Statements of subsidiary companies,
on a quarterly basis.
The Board Audit Committee also periodically reviews
the progress on execution of major overseas projects
and the risk ratings, Outstandings and Inventory
levels including the action plan for its realization and
other specific areas as requested by the Board.
23
Subsidiary Companies
The Company has nine unlisted subsidiary
companies, of which four are Indian subsidiaries.
As defined in Clause 49 III of the Listing Agreement,
none of the Indian subsidiary falls under the
category of ‘material non-listed Indian subsidiary’.
However, the financial statements of all subsidiary
companies including investments made, if any, are
periodically reviewed by Board Audit Committee.
The financial performance, Minutes of Board
Meetings of these subsidiary companies and all
significant transactions or arrangements entered
into by the subsidiary companies are reviewed by
the Board. The business plans and annual targets
of operating subsidiaries are also discussed at the
Board Meetings of the Company.
Managerial Remuneration
(a) Remuneration Committee
The Remuneration Committee comprises 3 Non-
Executive Independent Directors – Mr. N. J. Jhaveri,
Mr. Nasser Munjee and Mr. S. N. Menon. Mr. S. N.
Menon was nominated as a member of the Board
Remuneration Committee on 30th July, 2009 and
Mr. S. D. Kulkarni ceased to be the Chairman of the
Board Remuneration Committee upon his retirement
on 20th September, 2009. During 2009-10, one
meeting was held on 29th May, 2009 which was
attended by Mr. S. D. Kulkarni, Mr. N. J. Jhaveri and
Mr. Nasser Munjee. The Non-Executive Chairman
of the Board attends the Remuneration Committee
Meeting by invitation. The Minutes of the
Remuneration Committee Meetings are circulated
and noted at the Board Meetings.
The Chairman of the Remuneration Committee
attended the last Annual General Meeting of the
Company held on 10th August, 2009.
(b) Remuneration Policy
The remuneration of the Managing Director
and Executive Director (if any) is reviewed by
the Remuneration Committee based on certain
criterias such as industry benchmarks, Company’s
performance and the responsibilities shouldered
by the concerned managerial person. The Balanced
Scorecard of the Managing Director/Executive
Director (if any) enlisting therein his performance/
VOLTAS
Annual Report 2009-2010

achievements under different parameters vis-à-vis Remuneration to Directors

the targets/goals, is reviewed by the Remuneration
The Directors’ remuneration paid/payable and sitting
Committee. The remuneration of the Managing
fees paid in 2009-10 and their shareholding in the
Director comprises salary, perquisites, allowances
Company as on date are given below:
and benefits and incentive remuneration and/or
commission. Annual salary increment, incentive Non-Executive Directors
remuneration or commission is decided by the
Name of Directors Commission Sitting Fees No. of
Remuneration Committee within the overall ceilings
for paid in Shares
prescribed under the Companies Act, 1956 and 2009-10* 2009-10 held
in line with the terms and conditions approved Rs. in Rs. in
Lakhs Lakhs
by the shareholders. The recommendation of the
Mr. Ishaat Hussain 31.50 1.70 -
Remuneration Committee is placed before the Board
Mr. Nasser Munjee 16.50 2.20 -
for its approval. The retirement benefits payable
Mr. N. J. Jhaveri 29.75 3.30 -
to Managing Director/Executive Director (if any) is
considered by the Remuneration Committee and Mr. S. D. Kulkarni** 5.50 0.70 1990
thereafter recommended to the Board. The revision Mr. Ravi Kant 5.25 0.60 -
in pension amounts payable to the retired Managing Mr. N. D. Khurody 16.25 1.40 1147
Director/Executive Director from time to time, is also Mr. Noel N. Tata 12.25 1.00 -
reviewed by the Committee and recommended to Mr. Jimmy S. Bilimoria 23.75 3.00 -
the Board for approval. Mr. S.N. Menon 14.00 1.60 -
Mr. Nani Javeri *** 5.25 0.60 -
The remuneration of Non-Executive Directors, by * Payable in 2010-11
way of commission is decided and approved by ** Ceased to be Director w.e.f. 20th September, 2009
the Board of Directors and also discussed with the *** Appointed as a Director w.e.f. 29th October, 2009
Remuneration Committee. The shareholders have, at
the 55th Annual General Meeting of the Company The Company did not have any pecuniary relationship
held on 10th August, 2009, approved payment of or transactions with the Non-Executive Directors
commission to the Non-Executive Directors, of a during 2009-10, except as stated above.
sum not exceeding 1% per annum of the net profits Remuneration of Managing Director
of the Company, calculated in accordance with
the provisions of the Act, for a period of five years (Rs. in Lakhs)
commencing from 1st April, 2010. The commission Name of Salary Perquisites Commission
for the financial year 2009-10 will be distributed Director and allowances for 2009-10*
amongst the Non-Executive Directors in accordance including
with the directives given by the Board. In addition contribution
to commission, the Non-Executive Directors of the to PF and
Company are also paid sitting fees for attending Superannuation
Board/Committee Meetings, as under: Fund
Mr. A. Soni 38.40 56.15 150.00
Board Meeting - Rs. 20,000 * Payable in 2010-11
Board Audit Committee Meeting - Rs. 20,000 Notes:
Remuneration Committee Meeting - Rs. 10,000 (a) Mr. A. Soni retired as the Managing Director
Nomination Committee Meeting - Rs. 10,000 of the Company upon expiry of his contract on
22nd April, 2010.
Investment Committee Meeting - Rs. 10,000
(b) Mr. Sanjay Johri was appointed as the Managing
Shareholders’/Investors’ Grievance
Director for a period of five years with effect from
Committee Meeting - Rs. 5,000 23rd April, 2010. As per the terms of appointment

24
 of Mr. Sanjay Johri, either party is entitled to
terminate the agreement by giving not less than
six months notice in writing to the other party or
the Company paying six months remuneration in
lieu of such notice. No severance fees is payable.
(c) The Company has not introduced any stock
options to its Directors/employees.
(d) Mr. A. Soni did not hold any Equity Shares of
the Company either singly or jointly. Similarly,
Mr. Sanjay Johri does not hold any Equity Shares
of the Company either singly or jointly.
6. Shareholders/Investors Grievance Committee
The Shareholders/Investors Grievance Committee,
apart from reviewing the shares related activities, also
looks into the redressal of shareholder and investor
complaints, compliances in respect of dividend
payments and transfer of unclaimed amounts to the
Investor Education and Protection Fund pursuant
to the provisions of Section 205C of the Companies
Act, 1956. Mr. Noel N. Tata, Non-Executive Director is
the Chairman of the Committee. The Shareholders/
Investors Grievance Committee Meeting is attended
by the Company Secretary and the Share Manager.
During the financial year 2009-10, two Meetings were
held on 29th October, 2009 and 22nd March, 2010.
The Minutes of the Shareholders/Investors Grievance
Committee Meetings are circulated and noted by the
Directors at the Board Meetings.
In order to benefit from the specialised services
provided by TSR Darashaw Limited (TSRDL) and
taking into consideration various other factors
including increase in costs and upgradation of
IT system from time to time, to meet with the
requirements of SEBI/Depositories, the Company has
outsourced its in-house shares related activities to
TSRDL with effect from 8th March, 2010 for providing
depository related services for shares held in demat
mode and as Transfer Agent in respect of shares
held in physical mode. A suitable announcement
in newspapers and individual intimation letter to
all the shareholders was sent by the Company in
March 2010 to that effect. TSRDL are also the Registrar
and Transfer Agents for almost all the other listed
Tata companies.
25
The Company had at the 55th Annual General
Meeting held on 10th August, 2009, taken the
approval of the shareholders for keeping the registers
and indexes of members and debentureholders,
copies of annual returns and all other relevant
documents in the office premises of TSRDL in
addition to the Registered Office of the Company
and/or such other office building within the premises
of the Company at Chinchpokli.
The number of complaints received from SEBI/Stock
Exchanges were very few, 8 during the financial year
2009-10 and the same have been suitably dealt with
and closed. The number of transfers pending as on
31st March, 2010 was 6.
Mr. V. P. Malhotra, General Manager – Taxation &
Company Secretary and Mr. A. H. Khilnani, Senior
Manager - Shares, liaise with SEBI and other
Regulatory authorities in the matter of investors
complaints. The Board has nominated Mr. V. P.
Malhotra as the Compliance Officer of the Company
for monitoring the share transfer process and other
related matters.
7. Other Committees
In addition to the above Committees, the Board has
constituted certain other Committees i.e. Board
Committee, Investment Committee, Committee
of Board, Nomination Committee and Ethics and
Compliance Committee.
(a) The Board Committee comprising any two
Directors is authorized to approve routine
matters such as opening/closing and changes
in the operation of bank accounts of the
Company, to grant limited power of attorney to
the officers of the Company and for authorizing
executives for signing sales tax and excise forms,
declarations, etc.
(b) The Investment Committee considers and
takes appropriate decisions for deployment of
surplus funds of the Company/investment in
Mutual Funds. Mr. S. D. Kulkarni, Non-Executive
Independent Director was the Chairman of
the Investment Committee. Consequent upon
his retirement, Mr. Jimmy S. Bilimoria, Non-
Executive Independent Director was appointed
as the Chairman of the Investment Committee
with effect from 29th October, 2009. The other
VOLTAS
Annual Report 2009-2010

members of the Investment Committee during 8. General Body Meetings

2009-10 were Mr. A. Soni, Managing Director and
Mr. M. M. Miyajiwala, Executive Vice President The last three Annual General Meetings (AGMs) were
(Finance) & Chief Financial Officer. During the held at Birla Matushri Sabhagar, 19, Sir Vithaldas
year under review, one Meeting of Investment Thackersey Marg, Mumbai – 400 020, as follows:
Committee was held on 4th February, 2010. The
status of investments made in Mutual Funds and Date of AGM Time Special Resolutions passed
returns/dividends earned are reported to the No. Nature
Investment Committee on a monthly basis and 53rd AGM – 3.30 p.m. – None
to the Board of Directors on a quarterly basis. 6th August, 2007
Mr. Nani Javeri, Non-Executive Independent 54th AGM – 3.30 p.m. – None
Director and Mr. Sanjay Johri, Managing Director 28th July, 2008
of the Company (in place of Mr. A. Soni) have 55th AGM – 3.30 p. m. 2 - Commission to Non-
been appointed as members of the Investment 10th August, 2009 Executive Directors
- Place of keeping and
Committee with effect from 19th April, 2010.
inspection of Registers
and Returns
(c) The Committee of Board (COB) comprising
Mr. Ishaat Hussain, Mr. A. Soni, Mr. N. D. Khurody No Special Resolutions are proposed to be passed
and Mr. Noel N. Tata was constituted to discuss through postal ballot at the ensuing Annual
and guide the Management on strategic issues. General Meeting.
During the year under review, three Meetings
were held. Consequent upon retirement of No Extraordinary General Meeting was held during
Mr. A. Soni, Mr. Sanjay Johri, Managing Director the financial year 2009-10.
has been appointed as a member of COB.
9. Details of Directors seeking appointment/
(d) The Nomination Committee comprising reappointment as required under Clause 49 IV(G)
Mr. Nasser Munjee (as the Chairman), of the Listing Agreement entered into with Stock
Mr. Ishaat Hussain and Mr. Noel N. Tata has been Exchanges.
constituted with the objective of identifying
As required under Clause 49 IV(G), particulars of
independent directors to be inducted to the
Directors seeking appointment/reappointment are
Board and take steps to refresh the constitution
given in the Explanatory Statements annexed to the
of the Board, from time to time. During the year Notice of the Annual General Meeting to be held on
under review, one Meeting of the Nomination 16th August, 2010.
Committee was held on 28th October, 2009.
10. Disclosures
(e) The Ethics and Compliance Committee
comprising Mr. Nasser Munjee and Mr. N. D. During the year under review, besides the
Khurody, has been constituted to oversee the transactions reported in Notes to Accounts
implementation of the Code of Conduct adopted (Refer Point No. 31), there were no other related
by the Company for prevention of Insider Trading party transactions with the promoters, directors,
and Corporate Disclosure Practices formulated management and subsidiaries that had a potential
for Tata group companies in accordance with the conflict with the interest of the Company at large.
SEBI (Prohibition of Insider Trading) Regulations, The interest of Directors, if any, on transactions are
1992. The Board of Directors have nominated disclosed at Board Meetings and the interested
Mr. M. M. Miyajiwala as the Compliance Officer Director does not participate in the discussion or
to ensure due compliance of the aforesaid Code. vote on such transactions. Details of transactions
Mr. B. N. Garudachar, General Manager (Corporate with related parties are placed before the Board Audit
Communications) has been nominated as Committee on quarterly basis. All transactions with
the Public Spokesperson of the Company for related parties were in the normal course of business
Corporate Disclosures. during 2009-10.

26
 None of the Directors are related to each other.
Mr. Nani Javeri, Independent Director was
appointed Additional Director of the Company with
effect from 29th October, 2009 and notice of his
appointment was given to the Stock Exchanges on
29th October, 2009.
During the last three years, there were no
strictures or penalties imposed by SEBI or the
Stock Exchanges or any statutory authority for
non-compliance of any matter related to capital markets.
The Company has adopted a Whistle Blower
Policy which enables the employees to report
concerns about unethical behaviour, actual or
suspected fraud or violation of Code of Conduct. The
mechanism provides for adequate safeguards against
victimization of employees and provides a direct
access to the Chairman of the Board Audit Committee
on concerns relating to financial accounting matters.
For all other concerns, if they pertain to employees
below the Vice-President level, the same gets referred
to the Ethics Counsellor and for Vice Presidents and
above, the same would be referred to the Chairman
of the Board Audit Committee. The Whistle Blower
Policy has been communicated to the employees
of the Company and its functioning is periodically
reviewed by the Board Audit Committee.
11.
Senior management has made the disclosure to
the Board and confirmed that they had no material
financial and commercial transactions that could have
a potential conflict with the interest of the Company
at large.
In the preparation of financial statements, the
Company has followed the Accounting Standards
as prescribed by the Central Government under the
Companies (Accounting Standards) Rules, 2006.
The Company has laid down procedures for the
risk assessment and minimization procedures. This
is reviewed by the Board to ensure that Executive
Management controls risk through a properly defined
framework.
The Company did not raise funds through
public/rights/preferential issues during the financial
year 2009-10.
In line with the requirements of SEBI, Secretarial
Audit is carried out on a quarterly basis by a firm of
practicing Company Secretaries to confirm that the
aggregate number of equity shares of the Company
27
held in NSDL and CDSL and in physical form tally
with the total number of issued/paid-up, listed and
admitted capital of the Company.
The Managing Director and Executive Vice
President (Finance) have certified to the Board
in accordance with Clause 49 V of the Listing
Agreement in respect of matters pertaining to
CEO/CFO certification for the financial year 2009-10.
The Company has complied with the Mandatory
requirements of Clause 49 of the Listing Agreement.
As regards Non-mandatory requirements, the
Company has constituted a Board Remuneration
Committee, adopted a Whistle Blower Policy and has
unqualified financial statements. The Non-Executive
Directors freely interact with the Management on
information that may be required by them. The
Management also shares with the Board, changes in
relevant laws and regulations and its implication on
the Company. The performance of Non-Executive
Directors is based on the contributions at Board/
Committee Meetings as well as time spent on
specific operational matters. The Company has not
adopted the Non-mandatory requirements in regard
to maintenance of Non-Executive Chairman’s office
and sending half – yearly financial results to the
shareholders at their residence.
Means of Communication
The quarterly and half-yearly results are published
in widely circulated newspapers: The Economic Times
and DNA in English; Maharashtra Times and Dainik
Mumbai Lakshadeep in Marathi.
As per the requirements of Clause 51 of
the Listing Agreement, all the data related
to quarterly financial results, shareholding
pattern, annual report, etc. were uploaded on
the SEBI’s EDIFAR website www.sebiedifar.nic.in
within the timeframe prescribed in this regard.
(since discontinued with effect from 1.4.2010, as per
SEBI Circular No.CIR/CFD/DCR/3/2010 dt. 16.4.2010).
Financial Results, Shareholding pattern, etc. are also
being filed through corpfiling. Investors can view these
information on the website www.corpfiling.co.in.
The financial results, official news releases and
presentations, conference calls with the institutional
investors or with the analysts are displayed on the
Company’s website www.voltas.com. Copies of Press
Release are also sent to the Stock Exchanges.
VOLTAS
Annual Report 2009-2010

12. General Shareholders Information

AGM: Date, time and venue Registrar & Transfer Agent:

TSR Darashaw Limited

Monday, 16th August, 2010 at 3.30 p.m. at
(with effect from 8th March, 2010)
Birla Matushri Sabhagar,
Unit : Voltas Limited
19, Sir Vithaldas Thackersey Marg, 6-10, Haji Moosa Patrawala Industrial Estate,
Mumbai - 400 020. 20, Dr. E. Moses Road,
Mahalaxmi, Mumbai 400 011
Financial Calendar Tel : 66568484
Fax : 66568494
(a) 1st April to 31st March e-mail: csg-unit@tsrdarashaw.com

(b) First Quarter Results Share Transfer System

– By 14th August, 2010
The transfers are processed and approved by the Share
(c) Second Quarter Results Transfer Committee on a fortnightly basis.
– By 13th November, 2010
Dematerialisation of shares and liquidity
(d) Third Quarter Results
– By 14th February, 2011 95.29 % of the share capital has been dematerialized
as on 31st March, 2010.
(e) Results for the year ending 31st March, 2011
- Before 30th May, 2011 Outstanding GDRs/ADRs/ Warrants or any
Convertible instruments, conversion date and
Date of Book closure likely impact on equity

Tuesday, 20th July, 2010 to Monday, The Company has not issued GDRs/ADRs/Warrants or
16th August, 2010 (both days inclusive). any Convertible instruments.

Plant locations
Dividend Payment date
The Company’s Plants are located at:
Dividend would be paid on or after (i) 2nd Pokhran Road,
17th August, 2010. Thane 400 601.
(ii) Shreenath Industrial Estate,
Listing on Stock Exchange C Building, Survey No.197,
Near Dadra Check Post,
Bombay Stock Exchange Limited, Dadra 396 230.
National Stock Exchange of India Limited (iii) Plot No.1-5, Sector 8,
I.I.E. Pantnagar Industrial Area, Dist. Udham
Singh Nagar. Rudrapur, Uttarakhand 263 145.
The Company has paid the listing fees to BSE and
NSE for the year 2010-11. Addresses for correspondence

All correspondence relating to shares should be

Stock Code
addressed to TSR Darashaw Limited, the Company’s
- NSE : VOLTAS Registrar & Transfer Agent at the address mentioned
above.
- BSE : 500575
Shareholders holding shares in electronic mode
- ISIN Number for should address their correspondence to the
NSDL/CDSL : INE226A01021 respective Depository Participants.

28
 Market Information

Market price data-monthly high/low and trading volumes during the last financial year on the BSE/NSE depicting liquidity
of the Company’s Equity Shares of Re.1 each on the said exchanges is given hereunder:

Bombay Stock Exchange Ltd. (BSE) National Stock Exchange of India Ltd.(NSE)

Month BSE No. of Turnover No. of Turnover

Sensex High Low Shares Rs. in High Low Shares Rs. In
Rs. Rs. Traded Lakhs Rs. Rs. Traded Lakhs

2009
April 11403 63.25 45.85 21020836 11966.12 64.90 45.80 60009545 34330.74

May 14625 103.70 60.20 18414890 14997.22 103.20 60.05 60892870 49334.96

June 14494 145.80 100.00 33137828 42273.46 145.80 102.00 103781898 132219.29

July 15670 146.50 108.90 18730688 24570.09 146.40 108.00 58070437 76061.02

August 15667 162.60 128.00 13417683 19586.62 165.00 128.15 48123748 70203.14

September 17127 160.50 143.30 7081393 10682.13 160.20 143.20 27554736 41474.49

October 15896 170.10 140.10 12305807 19328.34 174.80 140.15 40892126 64245.81

November 16926 182.00 143.10 8844346 14866.66 181.60 142.55 30425571 51193.38

December 17465 180.40 160.10 3783899 6427.43 180.55 160.05 16508950 28008.05

2010
January 16358 189.60 150.45 6387281 11162.49 189.40 150.10 27182204 47346.32

February 16430 166.90 148.35 3232049 5109.67 166.50 148.50 16313537 25755.59

March 17528 181.90 156.60 4153648 7093.90 181.90 156.25 16395545 28035.69

29
VOLTAS
Annual Report 2009-2010

Shareholding Pattern as on 31st March, 2010 Shareholders holding more than 1% Equity Shares of
the Company as on 31st March, 2010
Category No. of % of Issued
Shares held Share Name of Shareholder No. of % of
Capital Shares Issued
Tata Group of Companies 91580655 27.68 held Share
Capital
Insurance Companies Tata Sons Ltd. 78731780 23.79
(Government) 54147923 16.36
Life Insurance Corporation of India 41114851 12.43
Insurance Companies (Others) 20158209 6.09
ICICI Prudential Life Insurance Co. Ltd. 13144914 3.97
Mutual Funds and UTI 54290021 16.41 Tata Investment Corporation Ltd. 9542330 2.88
FIIs 29890191 9.03 General Insurance Corporation of India 4924580 1.49

Bodies Corporate 9172702 2.77 PCA India Infrastructure Equity Open Ltd. 4613679 1.39
Blackrock India Equities Fund
NRIs 3374526 1.02
(Mauritius) Ltd. 4416033 1.33
Banks 391569 0.12 Tata Infrastructure Fund 4308100 1.30
Foreign Companies 89850 0.03 The New India Assurance Company Ltd. 4240626 1.28

Directors 1147 0.00 Templeton Mutual Fund A/c Franklin

India Flexi Cap Fund 3613711 1.09
Public 67787947 20.49 Birla Sun Life Insurance Co. Ltd. 3607749 1.09
Total 330884740 100.00 DSP Blackrock India T.I.G.E.R. Fund 3480360 1.05

Distribution of shareholding as on 31st March, 2010

No. of equity shares held No. of shareholders % of No. of % of Issued Share

total shareholders Shares held Capital

Upto 5000 96627 97.81 41028325 12.40

5001 to 10000 1134 1.15 8057564 2.44

10001 to 20000 495 0.50 7143821 2.16

20001 to 30000 140 0.15 3457633 1.04

30001 to 40000 70 0.07 2456120 0.74

40001 to 50000 53 0.05 2419165 0.73

50001 to 100000 100 0.10 7296172 2.21

100001 and above 169 0.17 259025940 78.28

Total 98788 100.00 330884740 100.00

Physical Mode 20129 20.38 15573033 4.71

Electronic Mode 78659 79.62 315311707 95.29

30
 Unclaimed Dividends Remittance of Dividend through ECS

Pursuant to Section 205C of the Companies Act, 1956, the
amount of dividend remaining unpaid or unclaimed for a
period of seven years from the date of its transfer to the
Unpaid Dividend Account of the Company is required to be
transferred to the Investor Education and Protection Fund
(IEPF) established by the Central Government and no claim
shall lie against the said Fund or the Company for the amount
of dividend so transferred. Shareholders are advised to
claim the un-cashed dividends lying in the unpaid dividend
accounts of the Company before the due date. Given below
are the dates of declaration of dividend and corresponding
dates when unclaimed dividends are due for transfer to IEPF.
Date of declaration/ Dividend Due for transfer to
payment of for the the IEPF
dividend year
18th August, 2003 2002-03 23rd September, 2010
27th August, 2004 2003-04 1st October, 2011
29th August, 2005 2004-05 3rd October, 2012
Members holding shares in physical form, desirous of
receiving dividend by direct electronic deposit through
National Electronic Clearing Service (NECS) Scheme of
Reserve Bank of India to their bank accounts may authorize
the Company with their NECS mandate. For details, kindly
write to the Company’s Registrar & Transfer Agent – TSR
Darashaw Limited.
Bank details for Electronic Shareholding
While opening Accounts with Depository Participants (DPs),
you may have given your Bank Account details, which were
used by the Company for ECS/printing on dividend warrants
for remittance of dividend. However, pursuant to RBI
notification, remittance of dividend through ECS is replaced
by NECS. NECS operates on the new and unique bank
account number allotted by banks, post implementation
of Core Banking Solutions (CBS). In order to facilitate the
Company remit the dividend amount through NECS, please
furnish your new bank account number allotted to you by
your bank after implementation of CBS to your Depository
Participants (DP), along with photocopy of cheque pertaining
to your bank account, if not furnished earlier.

7th August, 2006 2005-06 7th September, 2013 Bank details for Physical Shareholding

In order to provide protection against fraudulent

6th August, 2007 2006-07 10th September, 2014
encashment of dividend warrants, the members are
requested to provide, if not provided earlier, their bank
28th July, 2008 2007-08 28th August, 2015 Account numbers, names and addresses of the Bank,
quoting Folio numbers to the Company’s Registrar &
10th August, 2009 2008-09 10th September, 2016 Transfer Agent – TSR Darashaw Limited to incorporate the
same on the dividend warrants.

DECLARATION BY THE MANAGING DIRECTOR ON COMPLIANCE WITH THE CODE OF CONDUCT

I hereby declare that all the Directors and Senior Management personnel have as on 31st March, 2010 affirmed
compliance of their respective Code of Conduct adopted by the Company and confirmation to that effect has been
given by each of them.

Mumbai, Sanjay Johri

28th May, 2010 Managing Director

31
VOLTAS
Annual Report 2009-2010

AUDITORS’ CERTIFICATE

To the Members of VOLTAS LIMITED

We have examined the compliance of conditions of Corporate Governance by VOLTAS LIMITED

(“the Company”) for the year ended on 31st March, 2010 as stipulated in Clause 49 of the Listing
Agreements of the Company with the Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the Management.

Our examination was limited to procedures and implementation thereof, adopted by the Company
for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an
expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we
certify that the Company has complied with the conditions of Corporate Governance as stipulated in
the above mentioned Listing Agreements.

We further state that such compliance is neither an assurance as to the future viability of the
Company nor the efficiency or effectiveness with which the Management has conducted the affairs of
the Company.

For Deloitte Haskins & Sells

Chartered Accountants
(Registration No. 117366W)

Nalin M. Shah
Hyderabad, Partner
28th May, 2010 Membership No. 15860

32
 AUDITORS’ REPORT

To the Members of Voltas Limited (iii) the reports on the accounts of the Qatar, Bahrain
and UAE Branches audited by other auditors have
1. We have audited the attached Balance Sheet of
been forwarded to us and have been dealt with by
VOLTAS LIMITED (“the Company”) as at 31st March,
us in preparing this report;
2010, the Profit and Loss Account and the Cash Flow
Statement of the Company for the year ended on that (iv) the Balance Sheet, the Profit and Loss Account and
date, both annexed thereto, in which are incorporated the Cash Flow Statement dealt with by this report
the Returns from the Qatar, Bahrain and United Arab are in agreement with the books of account and
Emirates (‘UAE’) Branches audited by other auditors. the audited Branch Returns;
These financial statements are the responsibility of
(v) in our opinion, the Balance Sheet, the Profit
the Company’s Management. Our responsibility is to
and Loss Account and the Cash Flow Statement
express an opinion on these financial statements based
dealt with by this report are in compliance with
on our audit.
the Accounting Standards referred to in Section
2. We conducted our audit in accordance with the 211(3C) of the Companies Act, 1956;
auditing standards generally accepted in India. Those
(vi) in our opinion and to the best of our information
Standards require that we plan and perform the audit
and according to the explanations given to us,
to obtain reasonable assurance about whether the
the said accounts give the information required
financial statements are free of material misstatements.
by the Companies Act, 1956 in the manner
An audit includes examining, on a test basis, evidence
so required and give a true and fair view in
supporting the amounts and the disclosures in the
conformity with the accounting principles
financial statements. An audit also includes assessing
generally accepted in India:
the accounting principles used and the significant
estimates made by the Management, as well as (a) in the case of the Balance Sheet, of the state of
evaluating the overall financial statement presentation. affairs of the Company as at 31st March, 2010;
We believe that our audit provides a reasonable basis
for our opinion. (b) in the case of the Profit and Loss Account, of
the profit of the Company for the year ended
3. As required by the Companies (Auditor’s Report) Order, on that date and
2003 (CARO) issued by the Central Government in terms
(c) in the case of the Cash Flow Statement, of the
of Section 227(4A) of the Companies Act, 1956, we give
cash flows of the Company for the year ended
in the Annexure a statement on the matters specified in
on that date.
paragraphs 4 and 5 of the said Order.
5. On the basis of the written representations received from
4. Further to our comments in the Annexure referred to in
the Directors as on 31st March, 2010 taken on record
paragraph 3 above, we report as follows:
by the Board of Directors, we report that none of the
(i) we have obtained all the information and Directors is disqualified as on 31st March, 2010 from being
explanations which to the best of our knowledge appointed as a director in terms of Section 274(1)(g) of the
and belief were necessary for the purposes of Companies Act, 1956.
our audit;

(ii) in our opinion, proper books of account as For Deloitte Haskins & Sells
required by law have been kept by the Company Chartered Accountants
so far as it appears from our examination of (Registration No. 117366W)
those books and proper returns adequate for the
purposes of our audit have been received from Nalin M. Shah
the Qatar, Bahrain and UAE Branches audited by Hyderabad, Partner
other auditors; 28th May, 2010 Membership No. 15860

33
VOLTAS
Annual Report 2009-2010
ANNEXURE TO THE AUDITORS’ REPORT
(Referred to in paragraph 3 of our report of even date)
(i) Having regard to the nature of the Company’s business/
activities/result/transactions etc., clauses (x), (xii), (xiii),
(xiv), (xviii), (xix) and (xx) of CARO are not applicable.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records
showing full particulars, including quantitative
details and situation of the fixed assets.
(b) The fixed assets were physically verified during
the year by the Management in accordance with
a regular programme of verification which, in
our opinion, provides for physical verification
of all the fixed assets at reasonable intervals.
According to the information and explanation
given to us, no material discrepancies were
noticed on such verification.
(c) The fixed assets disposed off during the year, in
our opinion, do not constitute a substantial part of
the fixed assets of the Company and such disposal
has, in our opinion, not affected the going concern
status of the Company.
(iii) In respect of its inventory:
(a) As explained to us, the inventories were physically
verified during the year by the Management at
reasonable intervals.
(b) In our opinion and according to the information
and explanations given to us, the procedures of
physical verification of inventories followed by the
Management were reasonable and adequate in
relation to the size of the Company and the nature
of its business.
(c) In our opinion and according to the information
and explanations given to us, the Company has
maintained proper records of its inventories
and no material discrepancies were noticed on
physical verification.
(iv) The Company has neither granted nor taken any loans,
secured or unsecured, to/from companies, firms or the
parties listed in the Register maintained under Section
301 of the Companies Act, 1956.
(v) In our opinion and according to the information
and explanations given to us, having regard to the
explanations that some of the items purchased are
of special nature and suitable alternative sources
are not readily available for obtaining comparable
quotations, there is an adequate internal control system
commensurate with the size of the Company and
the nature of its business with regard to purchases of
inventory and fixed assets and the sale of goods and
services. During the course of our audit, we have not
observed any major weakness in such internal control
system.
(vi) In respect of contracts or arrangements entered in the
Register maintained in pursuance of Section 301 of the
Companies Act, 1956, to the best of our knowledge
34
and belief and according to the information and
explanations given to us:
(a) The particulars of contracts or arrangements
referred to Section 301 that needed to be entered
in the Register maintained under the said Section
have been so entered.
(b) Where each of such transaction is in excess of
Rs.5 lakhs in respect of any party, the transactions
have been made at prices which are prima facie
reasonable having regard to the prevailing market
prices at the relevant time except in respect
of certain purchases for which comparable
quotations are not available and in respect of
which we are unable to comment.
(vii) According to the information and explanations
given to us, the Company has not accepted any
deposit from the public during the year. In respect of
unclaimed deposits, the Company has complied with
the provisions of Sections 58A & 58AA or any other
relevant provisions of the Companies Act, 1956.
(viii) In our opinion, the Company has an adequate internal
audit system commensurate with the size and the
nature of its business.
(ix) We have broadly reviewed the books of account
maintained by the Company pursuant to the rules
made by the Central Government for the maintenance
of cost records under Section 209(1)(d) of the
Companies Act, 1956 in respect of air conditioning
system and refrigerators and are of the opinion that
prima facie the prescribed accounts and records have
been made and maintained. We have, however, not
made a detailed examination of the records with a view
to determining whether they are accurate or complete.
To the best of our knowledge and according to the
information and explanations given to us, the Central
Government has not prescribed the maintenance of
cost records for any other product of the Company.
(x) According to the information and explanations given
to us in respect of statutory dues:
(a) The Company has generally been regular in
depositing undisputed dues, including Provident
Fund, Investor Education and Protection Fund,
Employees’ State Insurance, Income-tax, Sales
Tax, Wealth Tax, Service Tax, Customs Duty, Excise
Duty, Cess and other material statutory dues
applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in
respect of Income-tax, Wealth Tax, Customs Duty,
Excise Duty, Cess and other material statutory
dues in arrears as at 31st March, 2010 for a period
of more than six months from the date they
became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax
and Excise Duty which have not been deposited as on
31st March, 2010 on account of disputes are given below:

Statute Nature of Dues Forum where Dispute Period to which the amount Amount
is pending relates involved
(Rs. in lakhs)
Income Tax Act, 1961 Income Tax High Court 1973-75 1.32
The Central Excise Act, Excise Duty Supreme Court 1993-96 45.74
1944
High Court 1986-87 7.95
Customs, Excise and 2001-02 5.52
Service Tax Appellate
Tribunal (CESTAT)
Commissioner of 1983-86 20.21
Central Excise (Appeals)
Commissioners/ 1975, 1982, 1984, 1985-91, 1862.85
Adjudicating Authority 1992-95, 1997-2008
Finance Act, 1994 and Service Tax Customs, Excise and 1998-2003, 2004-06 237.70
Service Tax Laws Service Tax Appellate
Tribunal (CESTAT)
Commissioner of 2001-08 70.97
Central Excise (Appeals)
Commissioners/ 1998-2008 2490.19
Adjudicating Authority
Central Sales Tax Act CST, VAT, GST and Entry Supreme Court 1993-94, 1996-2001 543.71
and Value Added Tax Tax (including penalty High Courts 1988-91, 1992-94, 1995-96, 2366.27
Act of various States and interest) 1997-2000, 2002-05, 2007-10
Appellate Tribunals 1986-88, 1989-90, 1991-93, 897.72
1994-98, 1999-2005, 2006-08
Commissioner (Appeals) 1989-2008 1224.42
Deputy Commissioner 1989-92, 2003-10 589.00
(Appeals)
Assessing Authority 1985-89, 1990-2007 1867.54
(xi) In our opinion and according to the information of the Balance Sheet, we report that funds raised on
and explanations given to us, the Company has not short-term basis have not been used during the year for
defaulted in the repayment of dues to banks. long term investment.

(xii) In our opinion and according to the information and (xv) To the best of our knowledge and according to the
explanations given to us, the terms and conditions of information and explanations given to us, no fraud by
the guarantees given by the Company for loans taken the Company and no material fraud on the Company
by others from banks and financial institutions are not has been noticed or reported during the year.
prima facie prejudicial to the interests of the Company.
For Deloitte Haskins & Sells
(xiii) In our opinion and according to the information and
Chartered Accountants
explanations given to us, the term loans have been (Registration No. 117366W)
applied for the purposes for which they were obtained.
Nalin M. Shah
(xiv) In our opinion and according to the information and Hyderabad, Partner
explanations given to us and on an overall examination 28th May, 2010 Membership No. 15860

35
VOLTAS
Annual Report 2009-2010

BALANCE SHEET AS AT 31ST MARCH, 2010

As at
31-3-2009
Schedule Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs
SOURCES OF FUNDS
SHAREHOLDERS FUNDS
1. SHARE CAPITAL A 3307.37 3307.34
2. RESERVES AND SURPLUS B 96215.15 69592.05
3. TOTAL 99522.52 72899.39
LOAN FUNDS
4. SECURED LOANS C 1908.06 12844.26
5. DEFERRED TAX LIABILTY (Overseas) 8.39 Nil
TOTAL 101438.97 85743.65
APPLICATION OF FUNDS
6. FIXED ASSETS
GROSS BLOCK D 30638.51 29392.58
LESS : DEPRECIATION 13931.37 13053.12
NET BLOCK 16707.14 16339.46
CAPITAL WORK-IN-PROGRESS 761.12 965.14
17468.26 17304.60
7. INVESTMENTS E 33996.66 23580.03
8. DEFERRED TAX ASSET (NET) (See Note 10, Schedule ‘P’) 1911.86 2158.58
9. CURRENT ASSETS, LOANS AND ADVANCES
1. Inventories F 106174.88 105143.05
2. Sundry Debtors G 84728.00 81684.47
3. Cash and Bank Balances H 40285.69 40024.44
4. Loans and Advances I 23849.48 22493.34
255038.05 249345.30
10. LESS : CURRENT LIABILITIES AND PROVISIONS
(A) Current Liabilities J 182409.82 182454.30
(B) Provisions J 24566.04 24190.56
206975.86 206644.86
11. NET CURRENT ASSETS 48062.19 42700.44
TOTAL 101438.97 85743.65

(For notes forming part of the Accounts see Schedule ’P’. For and on behalf of the Board
The Schedules referred to above form an integral part of the Accounts)
Chairman Ishaat Hussain
Managing Director Sanjay Johri
Directors Nasser Munjee
In terms of our report attached. N. J. Jhaveri
Ravi Kant
For Deloitte Haskins & Sells N. D. Khurody
Chartered Accountants N. N. Tata
J. S. Bilimoria
S. N. Menon
Nani Javeri
Executive Vice President (Finance) M. M. Miyajiwala
Nalin M. Shah General Manager - Taxation
Partner & Company Secretary V. P. Malhotra
Hyderabad, 28th May, 2010 Mumbai, 28th May, 2010

36
 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010

Year ended
31st March,
2009
Schedule Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs
1. SALES AND SERVICES (See Note 11 and 28, Schedule ‘P’) 456507.53 407024.50
Less : EXCISE DUTY 2328.42 3695.81
NET SALES AND SERVICES 454179.11 403328.69
2. OTHER INCOME K 7561.05 9416.49
3. COST OF SALES, SERVICES AND EXPENSES L 414480.66 376891.70
4. PROFIT BEFORE INTEREST, DEPRECIATION
AND EXCEPTIONAL ITEMS 47259.50 35853.48
5. INTEREST M 695.69 661.53
6. DEPRECIATION / AMORTISATION ON FIXED ASSETS 1639.25 1659.48
7. PROFIT BEFORE EXCEPTIONAL ITEMS 44924.56 33532.47
8. EXCEPTIONAL ITEMS N 3639.39 3200.44
9. PROFIT BEFORE TAXATION 48563.95 36732.91
10. PROVISION FOR TAXATION
– Provision for Current Tax 15493.19 11363.92
[(Including Foreign Income Tax Rs. 879.66 Lakhs
(2008-09: Rs. 707.28 Lakhs)]
– Provision for Taxation of Earlier Years Written Back (1640.21) (134.45)
– Provision for Deferred Tax 255.11 (115.46)
– Provision for Wealth Tax 33.91 40.00
– Provision for Fringe Benefit Tax Nil 320.00
14142.00 11474.01
11. PROFIT AFTER TAXATION 34421.95 25258.90
12. BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR 6225.40 5860.40
13. AMOUNT TRANSFERRED FROM FOREIGN PROJECTS RESERVE 275.00 300.00
14. PROFIT AVAILABLE FOR APPROPRIATIONS 40922.35 31419.30
15. APPROPRIATIONS :
(a) GENERAL RESERVE 25000.00 19000.00
(b) PROPOSED DIVIDEND 6617.69 5294.16
(c) TAX ON DIVIDEND 1099.12 899.74
32716.81 25193.90
16. BALANCE CARRIED FORWARD 8205.54 6225.40
Basic and diluted earnings per share of Re. 1 each
(including Exceptional items) (in Rs.) (See Note 13, Schedule ‘P’) 10.40 7.63

(For notes forming part of the Accounts see Schedule ’P’. For and on behalf of the Board
The Schedules referred to above form an integral part of the Accounts)
Chairman Ishaat Hussain
Managing Director Sanjay Johri
Directors Nasser Munjee
In terms of our report attached. N. J. Jhaveri
Ravi Kant
For Deloitte Haskins & Sells N. D. Khurody
Chartered Accountants N. N. Tata
J. S. Bilimoria
S. N. Menon
Nani Javeri
Executive Vice President (Finance) M. M. Miyajiwala
Nalin M. Shah General Manager - Taxation
Partner & Company Secretary V. P. Malhotra
Hyderabad, 28th May, 2010 Mumbai, 28th May, 2010

37
VOLTAS
Annual Report 2009-2010

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010

2008-09
Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs
A. CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before Taxation 48563.95 36732.91
Add - Adjustments for :
Depreciation/Amortisation 1639.25 1659.48
Provision for doubtful debt and advances 1306.04 (94.85)
Unrealised exchange (gain) / loss (257.33) 109.67
Provision for Contingencies (1016.53) 232.94
Exchange difference on translation of foreign currency
cash and cash equivalents 54.56 (74.16)
Provision for Diminution in value of Investments Nil 140.43
(Profit) on Sale/Retirement of Fixed Assets (Net) (2830.43) (2456.85)
(Profit) on Sale of Non Trade Current Investments (Net) (2.62) (700.52)
Interest Paid 695.69 661.53
Interest Received (1084.62) (1272.41)
Income from Investments (1122.81) (1582.54)
Impairment of Fixed Assets Nil 70.06
Provision for Employee Benefits 191.90 738.91
(Profit) on Sale of Chemicals Trading Business Nil (873.22)
Provision for Trade Guarantees 719.89 662.22
(1707.01) (2779.31)
Operating Profit before Working Capital changes 46856.94 33953.60

Less - Adjustments for:

(Increase)/Decrease in Inventories (1031.83) (44184.48)
(Increase)/Decrease in Trade and Other Receivables (3595.29) (28347.68)
(Increase)/Decrease in Loans and Advances 1709.09 (5865.73)
(Decrease)/Increase in Advances from Customers 6277.03 15815.06
(Decrease)/Increase in Trade Payables (6011.31) 44429.77
(2652.31) (18153.06)
Cash generated from operations 44204.63 15800.54
Less:
Taxes paid 15122.35 9991.31
NET CASH FROM OPERATING ACTIVITIES 29082.28 5809.23

38
 CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

2008-09
Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs
B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets (2011.91) (3370.42)

Sale of Fixed Assets 2974.89 700.74
Surrender of Tenancy Rights 64.54 2042.25
Purchase of Investments (96075.48) (91046.47)
Increase in Share Application Money (1046.83) (783.14)
Refund of Share Application Money Nil 432.50
Investment in Subsidiaries (2355.67) (6645.73)
Sale of Investments 88017.14 101464.91
Interest Received 1084.62 1276.11
Income from Investments 1122.81 1582.54
Advances to Subsidiary companies (2754.84) (1251.42)

NET CASH FROM / (USED IN) INVESTING ACTIVITIES (10980.73) 4401.87

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Share Capital (Calls in Arrears) 0.03 0.39
Securities Premium (Calls in Arrears) 0.11 1.98
Increase/(Decrease) in other Borrowings (9936.20) 9077.66
Repayment of Long Term Borrowings (1000.00) (1000.00)
Interest Paid (698.52) (664.72)
Decrease in unpaid Deposits (2.07) (2.11)
Dividend paid including dividend tax (6149.09) (5194.80)

NET CASH FROM / (USED IN) FINANCING ACTIVITIES (17785.74) 2218.40

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 315.81 12429.50

CASH AND CASH EQUIVALENTS AS AT 1-4-2009 (See Schedule ‘H’) 40024.44 27520.78
EXCHANGE DIFFERENCE ON TRANSLATION OF FOREIGN
CURRENCY CASH AND CASH EQUIVALENTS (54.56) 74.16
CASH AND CASH EQUIVALENTS AS AT 31-3-2010 (See Schedule ‘H’) 40285.69 40024.44
For and on behalf of the Board

Chairman Ishaat Hussain

Managing Director Sanjay Johri
Directors Nasser Munjee
In terms of our report attached. N. J. Jhaveri
Ravi Kant
For Deloitte Haskins & Sells N. D. Khurody
Chartered Accountants N. N. Tata
J. S. Bilimoria
S. N. Menon
Nani Javeri
Executive Vice President (Finance) M. M. Miyajiwala
Nalin M. Shah General Manager - Taxation
Partner & Company Secretary V. P. Malhotra
Hyderabad, 28th May, 2010 Mumbai, 28th May, 2010

39
VOLTAS
Annual Report 2009-2010

SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2010

SCHEDULE ‘A’ : SHARE CAPITAL As at

31-3-2009
Rupees Rupees
in Lakhs in Lakhs
1. AUTHORISED
60,00,00,000 Equity Shares of Re. 1 each 6000.00 6000.00
40,00,000 Redeemable Preference Shares of Rs.100 each 4000.00 4000.00
TOTAL 10000.00 10000.00

2. ISSUED, SUBSCRIBED AND CALLED-UP (See Note 2, Schedule ‘P’)

33,08,84,740 Equity Shares of Re.1 each 3308.85 3308.85
Less: Calls in Arrears 1.48 1.51
TOTAL 3307.37 3307.34

SCHEDULE ‘B’ : RESERVES AND SURPLUS As at

31-3-2009
Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs
1. SECURITIES PREMIUM
As per last Balance Sheet 626.60 624.62
Add: Calls in Arrears received during the year 0.11 1.98
626.71 626.60
2. CAPITAL RESERVE
As per last Balance Sheet 155.52 155.52

3. CAPITAL REDEMPTION RESERVE

As per last Balance Sheet 125.70 125.70

4. GENERAL RESERVE
As per last Balance Sheet 62182.83 43182.83
Add : Transferred from Profit and Loss Account 25000.00 19000.00
87182.83 62182.83

5. STAFF WELFARE RESERVE

As per last Balance Sheet 1.00 1.00

6. FOREIGN PROJECTS RESERVE

As per last Balance Sheet 275.00 575.00
Less : Transferred to Profit and Loss Account 275.00 300.00
Nil 275.00
7. FOREIGN EXCHANGE TRANSLATION RESERVE
As per Last Balance Sheet Nil Nil
Add: Created during the year (82.15) Nil
(82.15) Nil
8. PROFIT AND LOSS ACCOUNT 8205.54 6225.40
TOTAL 96215.15 69592.05

SCHEDULE ‘C’ : SECURED LOANS As at

31-3-2009
Rupees Rupees
in Lakhs in Lakhs
LOANS FROM BANKS (See Note 3, Schedule ‘P’) 1908.06 12844.26
TOTAL 1908.06 12844.26

40
SCHEDULE ‘D’ : FIXED ASSETS (At Cost Less Depreciation)
GROSS BLOCK AT COST DEPRECIATION / AMORTISATION NET BLOCK
As at Additions Deductions As at Up to For the On Impairment Up to As at As at
Particulars 31 March 31 March 31 March Year Deductions 31 March 31 March 31 March
2009 2010 2009 2010 2010 2009
(1+2-3) (5+6-7+8) (4-9) (1-5)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs
1. Freehold Land 639.23 Nil 10.10 629.13 Nil Nil Nil Nil Nil 629.13 639.23
2. Leasehold Land 312.73 Nil Nil 312.73 8.89 3.42 Nil Nil 12.31 300.42 303.84
3. Buildings * ** 8785.93 400.45 212.35 8974.03 2262.90 248.78 120.49 Nil 2391.19 6582.84 6523.03
4. Plant & Machinery ** 14448.63 1230.63 616.80 15062.46 7350.06 878.93 546.71 Nil 7682.28 7380.18 7098.57
5. Furniture & Fittings 1876.96 134.26 42.85 1968.37 1220.01 146.19 36.32 Nil 1329.88 638.49 656.95
6. Vehicles 610.17 69.63 87.90 591.90 190.59 56.09 57.48 Nil 189.20 402.70 419.58
7. Intangible Assets :
Manufacturing Rights &
Technical Know-how 1004.32 Nil Nil 1004.32 1004.32 Nil Nil Nil 1004.32 Nil Nil
8. Software 1714.61 380.96 Nil 2095.57 1016.35 305.84 Nil Nil 1322.19 773.38 698.26
29392.58 2215.93 970.00 30638.51 13053.12 1639.25 761.00 Nil 13931.37 16707.14 16339.46
Previous Year (26302.39) (4280.49) (1190.30) (29392.58) (12227.74) (1659.48) (904.16) (70.06) (13053.12) (16339.46)
9. Capital Work-in-Progress [Including advances against Capital Expenditure Rs.649.35 Lakhs (31-3-2009: Rs 706.25 Lakhs)] 761.12 965.14
17468.26 17304.60

* Includes Rs. 0.47 Lakh ( 31-03-2009: Rs. 0.49 Lakh) being cost of shares and bonds in Co-operative Housing Societies.
** Fixed Assets include assets held for sale aggregating Rs. 382.06 Lakhs (31-03-2009: Rs. 398.06 Lakhs), valued at the lower of the estimated net realisable value
and net book value.

SCHEDULE ‘E’ : INVESTMENTS (at Cost) (contd.) As at

31-3-2009
Currency / Rupees Rupees Rupees
No. Face Value in Lakhs in Lakhs in Lakhs
LONG TERM INVESTMENTS
1. TRADE INVESTMENTS
Fully paid Equity Shares of Subsidiary Companies :
UNQUOTED:
Auto Aircon (India) Ltd. 1,13,00,000 Rs. 10 565.00 565.00
Simto Investment Company Ltd. 14,62,087 Rs. 10 204.14 204.04
(1000 shares purchased during the year)
Agro Foods Punjab Ltd. 2,80,000 Rs. 100 Nil Nil
(Beneficial rights transferred pending transfer of shares)
Westerwork Engineers Ltd. (Under Liquidation) 9,600 Rs. 100 109.29 109.29
Metrovol FZE, Jebel Ali, UAE 1 AED 2000000 10.78 10.78
Weathermaker Ltd., UAE 4,08,441 US $ 1 307.20 307.20
VIL Overseas Enterprises B.V., The Netherlands 13,635 Euro 45.38 265.21 265.21
Universal Comfort Products Ltd.(w.e.f.17th June, 2008) 2,76,42,000 Rs. 10 1694.91 1694.91
Rohini Industrial Electricals Ltd. 12,29,360 Rs. 10 8688.49 6332.92
(2,98,211 shares purchased during the year)
Saudi Ensas Company for Engineering Services W.L.L., 15,860 SR 100 17.90 17.90
Saudi Arabia ( w.e.f. 28th January, 2009 )
11862.92 9507.25

41
VOLTAS
Annual Report 2009-2010

SCHEDULE ‘E’ : INVESTMENTS (at Cost) (contd.) As at

31-3-2009
Currency / Rupees Rupees Rupees
No. Face Value in Lakhs in Lakhs in Lakhs
Other fully paid Equity Shares
QUOTED:
Lakshmi Automatic Loom Works Ltd. 6,15,200 Rs. 10 110.03 110.03
Tata Chemicals Ltd. 2,00,440 Rs. 10 93.91 93.91
Lakshmi Machine Works Ltd. 6,00,000 Rs. 10 600.48 600.48
Reliance Industries Ltd. (See Note 4, Schedule 'P') 2,640 Rs. 10 4.55 4.55
UNQUOTED:
Tata International Ltd. 5,000 Rs. 1000 65.00 65.00
Lakshmi Ring Travellers (Coimbatore) Ltd. 1,20,000 Rs. 10 3.00 3.00
Tata Services Ltd. 448 Rs. 1000 4.48 4.48
Industrial Estates Private Ltd. 24 Rs. 1000 0.23 0.23
Tata Industries Ltd. 8,70,480 Rs. 100 874.59 874.59
Tata Projects Ltd. 1,35,000 Rs. 100 26.25 26.25
Premium Granites Ltd. 4,91,220 Rs. 10 49.77 49.77
Agrotech Industries Ltd. 3,67,500 US $ 1 115.42 115.42
OMC Computers Ltd. 4,04,337 Rs. 10 44.37 44.37
Terrot GmbH, Germany 1 Euro 24000 140.43 140.43
Rujuvalika Investments Ltd. 1,83,333 Rs. 10 30.00 30.00
Naba Diganta Water Management Ltd. 47,97,000 Rs. 10 479.70 113.10
(36,66,000 shares subscribed during the year)
Lalbuksh Voltas Engineering Services and
Trading, L.L.C, Muscat, Sultanate of Oman 30,000 RO 1 8.14 8.14
Universal Weathermaker Factory L.L.C., Abu Dhabi 2,695 AED 1000 298.09 298.09
Avco Marine S.a.S, France 1,910 Euro 10 7.97 7.97
Other fully paid Preference Shares
Rallis India Ltd.
7.5% Cumulative Redeemable Preference Shares Rs. 10 Nil 500.00
(50,00,000 preference shares redeemed during the year)
Lakshmi Automatic Loom Works Limited
6% Cumulative Redeemable Preference Shares 5,50,000 Rs. 100 * Nil
(5,50,000 preference shares subscribed during the year)
2956.41 3089.81
2. OTHER INVESTMENTS
Fully paid Equity Shares :
UNQUOTED:
Voltas Employees Consumers Co-operative Society Ltd. 750 Rs. 10 0.08 0.08
Saraswat Co-operative Bank Ltd. 10 Rs. 10 ** **
Brihat Trading Private Ltd. 2 Rs. 10 *** ***
Super Bazar Co-operative Stores Ltd. 500 Rs. 10 0.05 0.05
0.13 0.13
TOTAL LONG TERM INVESTMENTS 14819.46 12597.19
CURRENT INVESTMENTS
Units of Mutual Funds:
UNQUOTED:
LICMF Saving Plus Fund - Daily Dividend Plan 4,65,03,667 Rs. 10 4650.36 4094.63
(55,57,380 units purchased during the year)
Birla Sun Life Short Term Fund - Institutional
Daily Dividend 4,49,83,860 Rs. 10 4500.86 Nil
(4,49,83,860 units purchased during the year)
HDFC Floating Rate Income Fund - Short Term Plan
-Wholesale Option Dividend Reinvestment Nil 1005.20
(99,77,301 units sold during the year)

42
SCHEDULE ‘E’ : INVESTMENTS (at Cost) (contd.) As at
31-3-2009
Currency / Rupees Rupees Rupees
No. Face Value in Lakhs in Lakhs in Lakhs
ICICI Prudential Ultra Short Term Plan Super
Premium Daily Dividend 1,99,61,143 Rs. 10 2000.31 Nil
(1,99,61,143 units purchased during the year)

DWS Cash Opportunities Cash Fund Institutional

Daily Dividend Reinvest 4,51,70,227 Rs. 10 4528.00 Nil
(4,51,70,227 units purchased during the year)

UTI Treasury Advantage Fund - Institutional Plan

Daily Dividend Reinvestment Nil 2000.44
(1,99,985 units sold during the year)

Reliance Money Manager Fund Institutional Option

Daily Dividend Nil 2018.36
(2,01,607 units sold during the year)

Templeton India Ultra Short Bond Fund Super

Institutional Plan Daily Dividend Reinvestment Nil 3024.85
(3,02,13,409 units sold during the year)

Kotak Flexi Debt Scheme Institutional -

Daily Dividend 4,63,70,240 Rs. 10 4659.05 Nil
(4,63,70,240 units purchased during the year)

Government Securities - UNQUOTED 0.05 0.55

Equity Shares - QUOTED:
Hindustan Unilever Ltd. 14,475 Re. 1 3.53 3.77
(1,000 shares sold during the year)
TOTAL CURRENT INVESTMENTS 20342.16 12147.80
TOTAL INVESTMENTS 35161.62 24744.99
Less : PROVISION FOR DIMINUTION IN VALUE 1164.96 1164.96
TOTAL 33996.66 23580.03

Quoted : Cost 812.50 812.74

: Market Value 11560.19 3347.43

Unquoted : Cost 34349.12 23932.25

* Cost Re. 1
** Cost Rs. 100
*** Cost Rs. 20

Abbreviations for Currencies :

Rs. : Indian Rupees US $ : United States Dollar SR : Saudi Riyal
AED : United Arab Emirates Dirhams RO : Omani Riyal Euro : European Union Currency

43
VOLTAS
Annual Report 2009-2010

SCHEDULE ‘E’ : INVESTMENTS (at Cost) (contd.)

Note: Investments purchased and sold during the year
Number of Units
Mutual Funds 2008-09
Birla Sun Life Floating Rate Fund STP IP Daily Dividend Reinvestment 1,00,66,841
Birla Sun Life Cash Plus Institutional Premium - Daily Dividend Reinvestment 7,48,73,239 —
Birla Sun Life Short Term Fund - Institutional Daily Dividend 1,00,04,210 —
Birla Sun Life Savings Fund Institutional Daily Dividend Reinvestment 1,00,17,726 —
DSP Black Rock Liquid Plus - Institutional Plan Daily Dividend — 1,50,168
DSP Black Rock Liquidity Fund - Institutional Plan Daily Dividend — 1,49,991
DWS Credit Opportunities Cash Fund Weekly Dividend Plan — 1,14,78,850
DWS Insta Cash Fund Super Institutional Plan Daily Dividend 6,48,20,626 —
DWS Ultra Short Term Fund - Institutional Daily Dividend 1,99,82,875 —
HDFC Floating Rate Income Fund - Short Term Plan - Wholesale Option Dividend Reinvestment 1,00,83,665 99,27,794
HDFC FMP - June 2008 (VIII) (2) — 2,00,00,000
HDFC Liquid Fund Premium Plan 81,57,738 1,63,16,341
HSBC Cash Fund Institutional Plus Daily Dividend — 49,98,017
HSBC Liquid Plus Institutional Plus Daily Dividend — 49,82,241
ICICI Prudential Flexible Income Plan Dividend Daily Reinvest Dividend — 47,88,882
ICICI Prudential Floating Rate Plan Daily Dividend Reinvest Dividend — 51,20,006
ICICI Prudential Institutional Liquid Plan - Super Institutional - Daily Dividend Reinvest Dividend — 50,00,683
ICICI Prudential Interval Fund II Quarterly Interval Plan II — 1,05,206
ICICI Prudential Interval Fund Quarterly Interval Plan -II Retail Dividend Reinvest Dividend — 52,08,626
ICICI Prudential Liquid - Super Institutional Plan Daily Dividend 4,80,27,436 —
ICICI Prudential Ultra Short Term Plan Premium Plus Daily Dividend 1,00,04,020 —
ICICI Prudential Flexible Income Plan Premium - Daily Dividend 3,31,79,066 —
ING Liquid Plus Fund IP Daily Dividend — 2,01,61,560
ING Vysya Liquid Fund Institutional Daily Dividend Option — 1,99,79,598
JM Fixed Maturity Fund - Series X — 3,65,33,990
JM Interval Fund Quarterly Plan 3 Institutional Dividend Plan — 2,44,081
JM Money Manager Fund Super Plus Plan Daily Dividend 5,53,80,891 2,58,49,036
JM High Liquidity Fund - Super Institutional Plan Daily Dividend 6,51,12,914 —
Kotak Floater Short Term Daily Dividend — 2,50,66,367
Kotak Flexi Debt Scheme Institutional Daily Dividend 1,99,05,449 —
Kotak Liquid (Institutional Premium) Daily Dividend 6,95,26,439 —
LICMF Floating Rate Fund -Dividend Plan — 2,51,96,177
LICMF Liquid Fund -Dividend Plan 4,09,87,758 9,34,40,309
LICMF Income Plus Fund - Daily Dividend Plan — 4,14,47,360
LICMF Saving Plus Fund - Daily Dividend Plan 4,11,81,931 —
Reliance Liquidity Fund Daily Dividend Reinvestment Option 4,49,90,532 1,99,96,917
Reliance Money Manager Fund Institutional Option Daily Dividend Plan 4,61,379 —
SBI Premier Liquid Fund Institutional Daily Dividend — 1,99,39,279
SBI SHF - Liquid Plus - Institutional Plan Daily Dividend — 2,02,59,385
TATA Floating Rate Short Term Institutional Plan Daily Dividend — 1,00,13,032
Tata Liquid Super High Investment Fund Daily Dividend 1,79,468 2,69,286
TATA Treasury Manager SHIP Daily Dividend 49,540 —
Templeton Floating Rate Income Fund Long Term Plan Super Institutional Option IP Dividend — 1,53,32,349
Templeton India Ultra Short Bond Fund Super Institutional Plan Daily Dividend Reinvestment 1,60,74,022 4,52,79,059
Templeton India Treasury Management Account Super Institutional Plan - Daily
Dividend Reinvestment 1,49,922 6,99,720
TFLD Tata Floater Fund Daily Dividend 1,49,54,913 5,84,39,324
UTI Fixed Maturity Plan HFMP 0308 I Institutional Dividend Plan Reinvestment — 1,11,202
UTI Fixed Maturity Plan QFMP 0208 Institutional Dividend Plan Reinvestment — 1,17,217
UTI Fixed Maturity Plan QFMP 07/08 - I Institutional Dividend Plan Reinvestment — 1,15,53,663
UTI Liquid Cash Plan Institutional Daily Income — 3,54,733
UTI Liquid Plus Fund Institutional Plan (Daily Dividend Option) Reinvestment — 1,63,289
UTI Treasury Advantage Fund - Institutional Plan Daily Dividend Reinvestment 1,178 —

44
SCHEDULE ‘F’ : INVENTORIES As at
31-3-2009
Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs

1. STORES 20.85 17.15

2. STOCK-IN-TRADE :
(a) Raw Materials and Components 7133.90 7864.26

(b) Work-in-Progress, (See Note 5, Schedule ‘P’) 613914.67 494291.76

Less: Amounts Invoiced 548070.76 425732.28
65843.91 68559.48

(c) Finished Goods 33176.22 28702.16

106154.03 105125.90
TOTAL 106174.88 105143.05

SCHEDULE ‘G’ : SUNDRY DEBTORS As at

31-3-2009
Rupees Rupees
in Lakhs in Lakhs

1. SALES ON DEFERRED TERMS OF PAYMENT

(i) Over six months old 42.93 62.66

(ii) Others Nil Nil

42.93 62.66

2. OTHER SALES
(i) Over six months old 36532.65 26708.71

(ii) Others 51989.78 58291.48

88522.43 85000.19

88565.36* 85062.85*

3. Less: PROVISION FOR DOUBTFUL DEBTS 3837.36 3378.38

TOTAL 84728.00 81684.47

* Of the above debts

(a) Fully secured, considered good 479.41 695.31

(b) Unsecured, considered good 84248.59 80989.16

(c) Considered doubtful 3837.36 3378.38

TOTAL 88565.36 85062.85

45
VOLTAS
Annual Report 2009-2010

SCHEDULE ‘H’ : CASH AND BANK BALANCES As at

31-3-2009
Rupees Rupees
in Lakhs in Lakhs
1. CASH IN HAND 144.29 132.14
2. CHEQUES ON HAND 4104.59 2398.32
3. BANK BALANCES WITH SCHEDULED BANKS 5283.05 13462.71
(See Note 6, Schedule ‘P’)
4. BANK BALANCES WITH NON-SCHEDULED BANKS 30753.76 24031.27
(See Note 7, Schedule ‘P’)
TOTAL 40285.69 40024.44

SCHEDULE ‘I’ : LOANS AND ADVANCES As at

31-3-2009
Rupees Rupees
in Lakhs in Lakhs
1. SUBSIDIARY COMPANIES 4083.45 1328.61
(See Note 8, Schedule ‘P’)

2. ADVANCES RECOVERABLE IN CASH OR IN KIND OR

FOR VALUE TO BE RECEIVED 16494.99 17955.53

3. ADVANCE PAYMENT OF TAXES (NET) 193.42 0.65

4. LOANS TO EMPLOYEES 154.65 178.58

5. ADVANCE SHARE APPLICATION MONEY (to Subsidiary) 2312.78 1348.10

6. DEPOSITS WITH CUSTOMERS / OTHERS 2079.12 2172.66

7. BALANCE WITH CUSTOMS, PORT TRUST, ETC. 142.09 273.17

25460.50* 23257.30*
8. Less: PROVISION FOR DOUBTFUL ADVANCES 1611.02 763.96
TOTAL 23849.48 22493.34

* Of the above advances

(a) Fully secured, considered good 163.59 93.33
(b) Unsecured, considered good 23685.89 22400.01
(c) Considered doubtful 1611.02 763.96
TOTAL 25460.50 23257.30

1. Due by Officers Nil 2.82

2. Maximum due by Officers at any time during the year 2.82 3.45
3. Due by firms or Private companies respectively in which any Director Nil Nil
of this Company is a Partner, a Director or a Member.

46
SCHEDULE ‘J’ : CURRENT LIABILITIES AND PROVISIONS As at
31-3-2009
Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs
(A) CURRENT LIABILITIES
1. ACCEPTANCES 7378.76 6079.85
2. SUNDRY CREDITORS
(a) Due to Micro and Small Enterprises (See Note 9, Schedule ‘P’) 257.87 301.43
(b) Others [including subsidiaries: Rs. 340.70 Lakhs
(31-3-2009: Rs. 500.31 Lakhs)] 98492.99 107291.56
98750.86 107592.99
3. ADVANCE PAYMENTS AND DEPOSITS RECEIVED
(a) From Customers / Others 68413.13 62691.62
(b) Against Unexpired Service Contracts 2252.40 1696.88
70665.53 64388.50
4. OTHER LIABILITIES 5422.12 4240.32
5. INTEREST ACCRUED BUT NOT DUE ON LOANS Nil 1.96
6. INVESTOR EDUCATION AND PROTECTION FUND -
AMOUNTS LIABLE TO BE CREDITED *
(a) Unpaid Dividend 183.16 138.35
(b) Unpaid Matured Deposits 7.30 9.37
(c) Interest accrued and due on (b) above 2.09 2.96
TOTAL (A) 182409.82 182454.30
(B) PROVISIONS
7. PROVISION FOR TAXATION (NET) 3917.35 4960.04
8. PROPOSED DIVIDEND 6617.69 5294.16
9. PROVISION FOR DIVIDEND TAX 1099.12 899.74
10. PROVISION FOR TRADE GUARANTEES (See Note 9, Schedule ‘P’) 5265.53 4545.64
11. PROVISION FOR EMPLOYEE BENEFITS 6541.35 6349.45
12. PROVISION FOR CONTINGENCIES (See Note 9, Schedule ‘P’) 1125.00 2141.53
TOTAL (B) 24566.04 24190.56
TOTAL (A) + (B) 206975.86 206644.86

* These figures reflect the position as at 31st March. The actual amount to be transferred to Investor Education and Protection Fund in
this respect shall be determined on the due dates. No amount was due for transfer as at 31st March.

SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT FOR THE
YEAR ENDED 31ST MARCH, 2010
SCHEDULE ‘K’ : OTHER INCOME Year ended
31st March,
2009
Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs
1. Income from Investments
[Tax deducted at source Rs. Nil (2008-09: Rs. Nil)]
(a) Dividend from Subsidiary companies (Long Term) 169.80 426.48
(b) Trade Investments (Long Term) 272.29 267.43
(c) Other Investments (Long Term) 0.41 1.85
(d) Other Investments (Current) 680.31 886.78
1122.81 1582.54
2. Miscellaneous Income 1834.86 1470.25
3. Provision for Contingencies written back 232.94 Nil
4. Profit on Redemption of Mutual Funds / Sale of Non-Trade Current
Investments (Net) 2.62 700.52
5. Rent Received 3283.20 2551.24
[Tax deducted at source : Rs. 485.20 Lakhs (2008-09: Rs 562.02 Lakhs)]
6. Foreign Exchange Gain (Net) Nil 1839.53
7. Interest Received
(a) In respect of sales on deferred payment terms and other accounts-Gross 186.91 209.67
(b) On fixed deposits with Banks 784.18 839.19
(c) On Income tax refunds 113.53 223.55
[Tax deducted at source Rs. 27.38 Lakhs (2008-09: Rs. 44.34 Lakhs)]
1084.62 1272.41
TOTAL 7561.05 9416.49

47
VOLTAS
Annual Report 2009-2010

SCHEDULE ‘L’ : COST OF SALES, SERVICES AND EXPENSES Year ended

31st March,
2009
Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs
1. Stock-in-Trade per 1-4-2009 (See Note 12, Schedule ‘P’) 54479.45 39753.91
2. Purchases and cost of jobs, manufacture and services 324575.52 310831.32
3. Stock-in-Trade per 31-3-2010 (See Note 12, Schedule ‘P’) 60836.48 54479.45
4. Cost of Sales and Services (1 + 2 - 3 ) 318218.49 296105.78
5. Staff Expenses
(a) Salaries,Wages and Bonus 44664.71 38978.88
(b) Company’s contribution to Provident Funds and other Funds 1576.04 1831.37
(c) Provision for Retirement Benefits 1601.13 1007.47
(d) Welfare Expenses 856.20 1041.85
48698.08 42859.57

6. Forwarding Charges (Net) (See Note 12, Schedule 'P') 1983.26 2106.14
7. Commission other than to Sole Selling Agents under Section
294 of the Companies Act, 1956 10409.43 5028.93
8. Advertising (Net) 2766.62 934.25
9. Rent paid 4371.43 3155.76
Less: Rent recovered Nil 4.03
4371.43 3151.73
10. Rates and Taxes 170.55 144.07
11. Insurance 1128.00 830.55
12. Stores Consumed 462.52 472.29
13. Power 241.13 254.04
14. Repairs to Buildings 163.87 327.80
15. Repairs to Plant and Machinery 368.67 428.17
16. Travelling and Conveyance 5723.84 5232.83
17. Stationery, Postage, Fax and Telephone 1775.29 1934.29
18. Auditors' Remuneration (See Note 19, Schedule 'P') 146.89 118.54
19. Audit fees payable to Branch Auditors (See Note 19, Schedule 'P') 35.92 31.63
20. Audit fees payable to Cost Auditors 0.43 0.28
21. Legal and Professional charges 1957.93 1012.20
22. Other expenses (See Note 12, Schedule 'P') 14111.66 15148.29
23. Bad and Doubtful Debts / Advances 1483.84 601.40
24. Donations 33.80 39.55
25. Net Loss on Sale of Fixed Assets 50.29 129.37
[including Capital Surplus of Rs. 8.62 Lakhs (2008-09 : Rs. 3.62 Lakhs)]
26. Loss on Foreign Exchange (Net) 178.72 NIL
TOTAL 414480.66 376891.70

48
SCHEDULE ‘M’ : INTEREST Year ended
31st March,
2009
Rupees Rupees
in Lakhs in Lakhs

Interest Paid

(a) On fixed loans 48.96 113.97

(b) On other accounts 646.73 547.56

TOTAL 695.69 661.53

SCHEDULE ‘N’ : EXCEPTIONAL ITEMS Year ended

31st March,
2009
Rupees Rupees
in Lakhs in Lakhs

1. Profit on Sale of Property / Assignment of Balance Leasehold 2880.72 2586.22

Rights / Transfer of Development Rights/ Surrender of
Tenancy Rights (Net)
[Including Capital Surplus Rs. 2772.99 Lakhs
(2008-09 : Rs. 2594.66 Lakhs)]

2. Profit on Sale of Chemicals Trading Business Nil 873.22

3. Reversal of Provision for Contingencies 783.59 Nil

3664.31 3459.44

Less :

4. Provision for diminution in value of Investments Nil 140.43

5. Cost of Voluntary Retirement Scheme 24.92 48.51

6. Impairment of Fixed Assets Nil 70.06

24.92 259.00

TOTAL 3639.39 3200.44

49
VOLTAS
Annual Report 2009-2010

SCHEDULE ‘O’ : COMPUTATION OF NET PROFIT IN ACCORDANCE WITH SECTIONS

198 AND 309(5) OF THE COMPANIES ACT, 1956
Year ended
31st March,
2009
Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs
1. Profit before Taxation as per Profit and Loss Account 48563.95 36732.91

2. Add:

(a) Managerial Remuneration, including benefits

in cash or in kind 404.55 259.08
(See Note below)

(b) Provision for Diminution in value of Investments Nil 140.43

(c) Directors’ Sitting fees 16.10 15.80

420.65 415.31

48984.60 37148.22

3. Less:

(a) Capital Surplus on Sale / Retirement of Fixed Assets 8.62 3.62

(b) Profit on Redemption of Mutual Funds / Sale of

Non-Trade Current Investments (Net) 2.62 700.52

(c) Wealth Tax 33.91 40.00

(d) Profit on Sale of Chemicals Trading Business / Profit on

Sale of property /Assignment of Balance Leasehold
Rights / Surrender of Tenancy Rights 2880.72 3467.88

2925.87 4212.02

Net Profit for Directors’ Commission referred to below: 46058.73 32936.20

Commission to Directors (other than Wholetime Director)

at 1% of the Net Profit : Rs. 460.59 Lakhs, restricted to 160.00 80.00

Commission to Wholetime Director 150.00 100.00

Note : The above excludes retirement benefits relating to former Wholetime Directors 79.37 71.55

50
SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010

1. SIGNIFICANT ACCOUNTING POLICIES

(i) The accounts are prepared on historical cost convention on accrual basis of accounting and comply with the Accounting
Standards as notified under the Companies (Accounting Standards) Rules, 2006 of the Companies Act, 1956.
The preparation of the accounts requires the Management to make estimates and assumptions considered in the reported
amounts of assets and liabilities (including the contingent liabilities) and the reported income and expenses during the
period. The Management believes that the estimates used in preparation of the accounts are prudent and reasonable.
Future results could differ due to these estimates and the differences between the actual results and the estimates are
recognised in the periods in which the results are known / materialise.
(ii) SALES AND SERVICES
(a) Sales exclude sales tax, value added tax and works contract tax but include excise duty. Commission earned on
consignment sales is accounted for as part of sales and services.
(b) Sales and services are accounted on accrual basis when the sale of goods or services is completed.
(c) Revenue from long-term contracts, where the outcome can be estimated reliably, is recognised under the percentage
of completion method by reference to the stage of completion of the contract activity. The stage of completion is
measured by calculating the proportion that costs incurred to date bear to the estimated total costs of a contract.
When the current estimate of total costs and revenue is a loss, provision is made for the entire loss on the contract
irrespective of the amount of work done.
(d) Long-Term Annual Maintenance Contracts :
The revenue from maintenance contracts is recognised on accrual basis and advance received in respect of future
period is accounted for as Unexpired Service Revenue.
In case of Mining Equipment, the revenue from such contracts is recognised in proportion to the cost actually incurred
during the year in terms of the total estimated cost for such contracts, as repairs and maintenance of such machineries
depends on its utilisation and wear and tear which varies from year to year. The excess of billings over cost is deferred
and accounted for as “Unexpired Service Revenue”. In case the actual cost incurred is higher than the billings, such cost
is accounted for immediately.

(iii) JOINT VENTURES

The accounts of the Company reflect its share of the Assets, Liabilities, Income and Expenditure of the Joint Venture
Operations which are accounted on the basis of the audited accounts of the Joint Ventures on line-by-line basis with
similar items in the Company’s accounts to the extent of the participating interest of the Company as per the Joint Venture
Agreements.

(iv) DEPRECIATION / AMORTISATION

Depreciation on all fixed assets has been provided on the Straight Line Basis at the rates prescribed in Schedule XIV to the
Companies Act, 1956, except Depreciation on furniture and fittings, which has been provided on the Written Down Value
Basis at the rates prescribed in Schedule XIV to the Companies Act, 1956.
Intangible assets are amortised on the Straight Line Basis over their useful life. Manufacturing Rights and Technical
Know-how have been amortised over 72 months and Software is amortised over 60 months.
Premium paid on Leasehold Land is amortised over the period of the lease, commencing from the date the land is put to
use for commercial operation.

(v) PROVISION FOR TRADE GUARANTEES

Provision for estimated costs to be incurred in providing warranty services is made in the accounts in the year in which
goods are sold or a long term contract is completed.

(vi) FIXED ASSETS

Fixed assets are stated at cost less accumulated depreciation / impairment.
Own manufactured goods are capitalised at cost excluding interest but including excise duty net of CENVAT, octroi duty
and receiving / installation charges.

51
VOLTAS
Annual Report 2009-2010

SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

Interest on borrowed money, allocated to and utilised for qualifying fixed assets, pertaining to the period upto the date of
capitalisation is added to the cost of the assets.
Assets acquired under finance leases are recognised at the lower of the fair value of the leased assets at inception and
the present value of minimum lease payments. Lease payments are apportioned between the finance charge and the
outstanding liability. The finance charge is allocated to periods during the leased term at a constant periodic rate of interest
on the remaining balance of the liability.

(vii) INTANGIBLE ASSETS

Intangible assets are stated at cost less accumulated amortisation.

(viii) IMPAIRMENT OF ASSETS

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment of assets. If
any indication of such impairment exists, the recoverable amount of such assets is estimated and impairment is recognised,
if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net
selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in prior
accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised.

(ix) PROVISIONS AND CONTINGENCIES

A provision is recognised when the Company has a present legal or constructive obligation as a result of past events and it
is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can
be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based
on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date
and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in Notes to Accounts.

(x) INVESTMENTS
Long term investments are carried at cost less provision for any diminution other than temporary, in the value of such
investments.
Current investments are carried at the lower of cost and fair value.

(xi) INVENTORIES
Inventories including Work-in-Progress (other than Construction Contracts) are valued at cost or net realisable value,
whichever is lower, cost being worked out on weighted average basis. Cost includes all charges for bringing the goods to
the point of sale, including octroi and other levies, transit insurance and receiving charges. With regard to Construction
Contracts, Work-in-Progress includes profits / losses to the extent recognised.

(xii) TAXES ON INCOME

Current Tax is the amount of the tax payable on the taxable income for the year as determined in accordance with the
provisions of the Income Tax Act, 1961.
Deferred Tax is recognised on timing differences, being the differences between the taxable income and the accounting
income that originate in one period and are capable of reversal in one or more subsequent periods.
Deferred Tax Assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual
certainty that there will be sufficient future taxable income available to realise such losses. Other Deferred Tax Assets are
recognised if there is reasonable certainty that there will be sufficient future taxable income to realise such assets.
(xiii) FOREIGN EXCHANGE TRANSACTIONS / TRANSLATIONS
(a) The foreign branches of the Company have been classified as “integral foreign operations”. Revenue transactions (other
than depreciation) of the foreign branches are incorporated in the Company’s accounts at the average exchange rate
during the year, fixed assets are incorporated at the average rate of the year of acquisition and current assets and
liabilities are translated at the rates of exchange prevailing on the date of the Balance Sheet. Depreciation is translated
at the average rate applicable to the fixed assets.

52
SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

(b) Monetary assets and liabilities relating to foreign currency transactions remaining unsettled at the end of the year
are translated at the year-end rate and the difference in translation and realised gains and losses on foreign exchange
transactions are recognised in the Profit and Loss Account. In respect of transactions covered by foreign exchange
contracts, the difference between the contract rate and the spot rate on the date of the transaction is charged to the
Profit and Loss Account over the period of the contract.
(xiv) ACCOUNTING FOR VOLUNTARY RETIREMENT SCHEMES
(a) The cost of Voluntary Retirement Schemes / Retrenchment Compensation including ex-gratia and additional gratuity
liability arising therefrom are charged to the Profit and Loss Account in the month of separation of employees.
(b) The Present Value of future payments to employees opting for Early Separation Scheme (ESS) and the additional
gratuity liability arising therefrom are charged to the Profit and Loss Account in the month of separation of employees.

(xv) OPERATING LEASE

Operating lease expenses / income are recognised in the Profit and Loss Account on Straight Line Basis, representative of
the time pattern of the user’s benefit.

(xvi) EMPLOYEE BENEFITS

(a) Defined Contribution Plan
Contribution to Superannuation Fund, a defined contribution scheme, is made at pre-determined rates to the
Superannuation Fund Trust and is charged to the Profit and Loss Account. There are no other obligations other than
the contribution payable to the Superannuation Fund Trust.
(b) Defined Benefit Plans
(i) The Company’s liabilities towards gratuity and post retirement medical benefit schemes are determined using
the projected unit credit method which considers each period of service as giving rise to an additional unit of
benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gains and losses
based on actuarial valuation done by the independent actuary carried out annually are recognised immediately
in the Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated
future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet
date on Government bonds where the currency and terms of the Government bonds are consistent with the
currency and estimated terms of the defined benefit obligation.
(ii) The Company’s Contribution to recognised Provident Fund paid / payable during the year is recognised in the
Profit and Loss Account. The shortfall, if any, between the return guaranteed by the statute and actual earnings
of the Fund is provided for by the Company and contributed to the Fund.
(c) Compensated Absences
Compensated absences which accrue to employees and which are expected to be availed in twelve months
immediately following the year end are reported as expenses during the year in which the employees perform the
services that the benefit covers and the liabilities are reported at the undiscounted amount of the benefit and where
the availment or encashment is otherwise not expected to wholly occur in the next twelve months, the liability on
account of the benefit is actuarially determined using the projected unit credit method.
(xvii) SEGMENT REPORTING
The accounting policies used in the preparation of the financial statements of the Company are also applied for Segment
Reporting. Revenue and expenses have been identified to segments on the basis of their relationship to the operating
activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to
segments on a reasonable basis, have been included under “Unallocated income / expenses”.
2. SHARE CAPITAL
Equity Share Capital includes :
(a) 9,76,61,300 shares of Re.1 each allotted as fully paid bonus shares by capitalising Rs.80.82 Lakhs out of the Securities
Premium Account, Rs.100 Lakhs from Capital Reserve and Rs.795.79 Lakhs out of General Reserve.

53
VOLTAS
Annual Report 2009-2010

SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

(b) 1,77,29,040 shares of Re.1 each allotted to the erstwhile shareholders of Tata-Merlin & Gerin Ltd. (TMG), The
National Electrical Industries Ltd. (NEI), Volrho Ltd., Wandleside National Conductors Ltd. (WNC) and Hyderabad
Allwyn Ltd. (HAL) consequent upon the amalgamation of these companies with the Company.
(c) 11,97,84,000 shares of Re.1 each allotted to the holders of Convertible Part `A’ of Rs.60 of the 14% Secured
Redeemable Partly Convertible Debentures 1992-99 on compulsory conversion thereof into equity shares.

3. SECURED LOANS – FROM BANKS

As at
31–3–2009
Rupees Rupees
Nature of Security in Lakhs in Lakhs

(a) Term Loan from Exim Bank Nil 1000.00

(Deposit of title deeds of certain immovable properties of the Company)

(b) Cash Credit from Banks 1908.06 11844.26

(Secured against assignment of Stocks, Book debts, contract dues and lien on Term
Deposits)

1908.06 12844.26

4. INVESTMENTS

(a) Under a loan agreement for Rs.60 Lakhs (fully drawn and outstanding) entered into between Agro Foods Punjab
Limited (AFPL) and the Punjab State Industrial Development Corporation Limited (PSIDC), the Company has
given an undertaking to PSIDC that it will not dispose off its shares in AFPL till the monies under the said loan
agreement between PSIDC and AFPL remain due and payable by AFPL to PSIDC. During 1998-99, the Company
had transferred its beneficial rights in the shares of AFPL.
(b) In respect of the Company’s investment in 2640 equity shares of Reliance Industries Limited, there is an
Injunction Order passed by the Court in Kanpur restraining the transfer of these shares. The share certificates
are, however, in the possession of the Company. Pending disposal of the case, dividend on these shares has not
been recognised.

5. INVENTORIES – WORK-IN-PROGRESS
In respect of Construction Contracts which are in progress as at the year end:

As at
31–3–2009
Rupees Rupees
in Lakhs in Lakhs

(a) Aggregate amount of costs incurred and net recognised profits (less recognised losses) 593388.31 476378.73

(b) Advances received for such contracts in progress 44711.67 48417.68

(c) The amount of retentions due for such contracts 20786.89 16793.88

(d) The gross amount due from customers for such contracts 45317.35 53167.71

(e) The gross amount due to customers for such contracts 19330.30 8395.92

54
SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

6. CASH AND BANK BALANCES – BANK BALANCES WITH SCHEDULED BANKS

As at
31–3–2009
Rupees Rupees
in Lakhs in Lakhs
(a) On Current Accounts 4237.61 4440.98
(b) On Fixed Deposit Accounts 1045.44 9021.73
5283.05 13462.71
7. CASH AND BANK BALANCES – BANK BALANCES WITH NON-SCHEDULED BANKS
As at
31-3-2009
Rupees Rupees
in Lakhs in Lakhs
(a) ON CURRENT ACCOUNTS
(i) Union National Bank, Abu Dhabi, U.A.E. 657.51 587.50
[Maximum balance during the year : Rs.8733.60 Lakhs (2008-09 : Rs.2912.42 Lakhs)]

(ii) Emirates Bank International, Dubai, U.A.E. 1061.90 651.97

[Maximum balance during the year : Rs.7154.84 Lakhs (2008-09 : Rs.1332.80 Lakhs)]

(iii) HSBC Bank Middle East, Abu Dhabi, U.A.E. 1968.31 9.59
[Maximum balance during the year : Rs.3695.52 Lakhs (2008-09 : Rs.104.99 Lakhs)]

(iv) HSBC Bank Middle East, Qatar 824.54 102.65

[Maximum balance during the year : Rs.3663.55 Lakhs (2008-09 : Rs.8296.11 Lakhs)]

(v) Commercial Bank of Qatar, Qatar 67.22 239.15

[Maximum balance during the year : Rs.459.55 Lakhs (2008-09 : Rs.341.94 Lakhs)]

(vi) Doha Bank, Qatar 770.48 1073.65

[Maximum balance during the year : Rs.6106.69 Lakhs (2008-09 : Rs.10214.18 Lakhs)]

(vii) HSBC Bank Middle East, Bahrain 67.00 101.58

[Maximum balance during the year : Rs.1684.20 Lakhs (2008-09 : Rs.3821.57 Lakhs)]

(viii) Abu Dhabi Commercial Bank, Abu Dhabi, U.A.E. 13.93 268.38
[Maximum balance during the year : Rs.1112.06 Lakhs (2008-09 : Rs.573.75 Lakhs)]

(ix) First Gulf Bank, Abu Dhabi, U.A.E. 2259.01 Nil

[Maximum balance during the year : Rs.3050.33 Lakhs (2008-09 : Rs.1073.16 Lakhs)]

(x) Standard Chartered Bank, Singapore 60.49 26.88

[Maximum balance during the year : Rs.195.99 Lakhs (2008-09 : Rs.213.87 Lakhs)]

(xi) ABN Amro Bank, Singapore 1232.82 2026.86

[Maximum balance during the year : Rs.4862.74 Lakhs (2008-09 : Rs.2292.96)]

(xi) CITI Bank, Dubai 3.01 Nil

[Maximum balance during the year : Rs.986.70 Lakhs (2008-09 : Rs.Nil)]

8986.22 5088.21

55
VOLTAS
Annual Report 2009-2010

SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

As at
31-3-2009
Rupees Rupees
in Lakhs in Lakhs
7. (b) ON FIXED DEPOSIT ACCOUNTS
(i) Abu Dhabi Commercial Bank, Abu Dhabi, U.A.E. 63.91 72.23
[Maximum balance during the year : Rs.66.61 Lakhs (2008-09 : Rs.217.80 Lakhs)]
(ii) Union National Bank, Abu Dhabi, U.A.E. 7455.42 4668.97
[Maximum balance during the year : Rs.11834.95 Lakhs (2008-09 : Rs.4668.97 Lakhs)]
(iii) Emirates Bank International, Dubai, U.A.E. 11.99 13.51
[Maximum balance during the year : Rs.12.60 Lakhs (2008-09 : Rs.13.51 Lakhs)]
(iv) HSBC Bank Middle East, Qatar 620.00 9822.36
[Maximum balance during the year : Rs.5164 Lakhs (2008-09 : Rs.10116.50 Lakhs)]
(v) Commercial Bank of Qatar, Qatar Nil Nil
[Maximum balance during the year : Nil (2008-09 : Rs.110.14 Lakhs)]

(vi) ABN Amro Bank, Singapore 1130.13 Nil

[Maximum balance during the year : Rs.3499.12 Lakhs (2008-09 : Nil)]
(vii) Doha Bank, Qatar 2506.07 2514.07
[Maximum balance during the year : Rs.6464.62 Lakhs (2008-09 : Rs.17363.08 Lakhs)]
(viii) HSBC Bank Middle East, Bahrain 1365.26 1434.76
[Maximum balance during the year : Rs.1508.10 Lakhs (2008-09 : Rs.4122.20 Lakhs)]

(ix) First Gulf Bank, Abu Dhabi, U.A.E. 2949.60 Nil

[Maximum balance during the year : Rs.3074.40 Lakhs (2008-09 : Rs.542.50 Lakhs)]

(x) HSBC Bank Middle East, Qatar 42.83 189.09

[Maximum balance during the year : Rs.186.79 Lakhs (2008-09 : Rs.2750.68 Lakhs)]

(xi) Union National Bank, Abu Dhabi, U.A.E. Nil 228.07

[Maximum balance during the year : Rs.228.07 Lakhs (2008-09 : Rs.1937.56 Lakhs)]

(xii) HSBC Bank Middle East, Abu Dhabi, U.A.E. 5622.33 Nil
[Maximum balance during the year : Rs.10545.60 Lakhs (2008-09 : Nil]
21767.54 18943.06
TOTAL 30753.76 24031.27

8. LOANS AND ADVANCES

Loans and Advances in the nature of loans given to Subsidiaries and Associates, etc.
Maximum Balance
during the year
As at As at
31-3-2009 31-3-2009
Rupees Rupees Rupees Rupees
Name of the Company in Lakhs in Lakhs in Lakhs in Lakhs
(a) Auto Aircon (India) Ltd. 78.60 77.60 78.60 77.60
(b) Saudi Ensas Company for Engineering Services W.L.L. 4.85 94.26 94.26 94.26
(c) Rohini Industrial Electricals Ltd. 1000.00 Nil 1000.00 Nil
(d) Universal Comfort Products Ltd. 3000.00 1156.75 3000.00 1162.98
Note :
Loans and Advances shown in (a) and (b) above to subsidiaries fall under the category of “Loans and Advances” in nature of
Loans in terms of Clause 32 of the Listing Agreement. There is no repayment schedule and no interest is payable.

56
SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

9. CURRENT LIABILITIES AND PROVISIONS

(a) According to information available with the Management, on the basis of intimation received from suppliers, regarding
their status under the Micro, Small and Medium Enterprises Development Act, 2006, the Company has the following
amounts due to Micro and Small Enterprises under the said Act.

As at
31-3-2009
Rupees Rupees
in Lakhs in Lakhs

(i) (a) Principal amount remaining unpaid to any supplier as on 31-3-2010 257.87 301.43

(b) Interest on (i)(a) above 8.79 10.19

(ii) The amount of interest paid along with the principal payment made to the supplier Nil Nil
beyond the appointed date during 2009-10.

(iii) Amount of interest due and payable on delayed payments 21.83 13.32

(iv) Amount of further interest remaining due and payable even in succeeding years 32.84 9.33

(v) Total outstanding dues of Micro and Small Enterprises

– Principal 257.87 301.43

– Interest 63.46 32.84

(b) Provisions

Rupees in Lakhs
Opening Additions Utilisation Reversal Closing
Balance Balance

Trade Guarantee 4545.64 5485.48 3252.35 1513.24 5265.53

(3883.42) (5577.10) (2439.68) (2475.20) (4545.64)

Contingency for tax matters 1357.94 Nil Nil 232.94 1125.00

(1125.00) (232.94) (Nil) (Nil) (1357.94)

Contingency for claims 783.59 Nil Nil 783.59 Nil

(783.59) (Nil) (Nil) (Nil) (783.59)

The provision for Trade Guarantee is expected to be utilised for warranty expenses / settlement of claims within a period of
1 to 5 years.

Note : Figures in brackets are of the previous year.

57
VOLTAS
Annual Report 2009-2010

SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

10. DEFERRED TAX ASSET

(A) Major components of deferred tax assets and liabilities arising are :

As at 31st March, 2009

Deferred Deferred Deferred Deferred
Tax Tax Tax Tax
Assets Liabilities Assets Liabilities
Rupees Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs in Lakhs
(i) Depreciation — 2743.48 — 2697.00
(ii) Voluntary Retirement Scheme 35.00 — 328.00 —
(iii) Unpaid Statutory Liabilities 576.00 — 495.58 —
(iv) Provision for Doubtful Debts and Advances 1439.00 — 1338.00 —
(v) Provision for Contingency 373.56 — 529.00 —
(vi) Provision for Employee Benefits 2173.14 — 2069.00 —
(vii) Others 58.64 — 96.00 —
Total 4655.34 2743.48 4855.58 2697.00
Deferred Tax Assets (Net) 1911.86 — 2158.58 —

(B) Deferred tax liablities (Foreign Branches)

Depreciation 8.39

11. SALES AND SERVICES

With regard to long term Construction Contracts undertaken, the amount of net revenue recognised is Rs.243858.40 Lakhs
(2008-09: Rs.212332.80 Lakhs).

12. COST OF SALES, SERVICES AND EXPENSES

(i) Opening and Closing Stock - In - Trade excludes WIP for Long Term Contracts Rs.476378.73 Lakhs (1-4-2008 : Rs.268742.82
Lakhs) and Rs 593388.31 Lakhs (31-3-2009 : Rs.476378.73 Lakhs), respectively.

(ii) (a) The Company makes contribution towards provident funds, a defined benefit retirement plan, and towards
superannuation fund, a defined contribution retirement plan for qualifying employees. These funds are administered
by the trustees appointed by the Company. Under the schemes, the Company is required to contribute a specified
percentage of salary to the retirement benefit schemes to fund the benefits.

(b) The Company makes annual contribution to Gratuity Funds, which are funded defined benefit plans for qualifying
employees. The scheme provides for lumpsum payment to vested employees at retirement, death while in
employment or on termination of employment as per the Company’s Gratuity Scheme. Vesting occurs upon
completion of 5 years of service.
The Company is also providing post retirement medical benefits to qualifying employees.
The most recent actuarial valuations of plan assets and the present values of the defined benefit obligations were
carried out as at 31st March, 2010. The present value of the defined benefit obligation and the related current service
cost and past service cost are measured using the Projected Unit Credit Method.
The following tables set out the funded status and amounts recognised in the Company’s financial statements as at
31st March, 2010 for the Defined Benefit Plans other than Provident Fund. According to the Management, the Actuary
has opined that actuarial valuation cannot be applied to reliably measure provident fund liabilities in the absence of
guidance from the Actuarial Society of India. Accordingly, the Company is currently not in a position to provide other
related disclosures as required by AS 15 read with the Accounting Standards Board Guidance. However, having regard
to the position of the Fund, the shortfall if any, between the guaranteed by the statute and actual earnings of the Fund
is provided for by the Company and contributed to the Fund.

58
SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

Defined Benefit Plans - As per Actuarial Valuation on 31st March, 2010

Gratuity Gratuity Post Pension

Unfunded Funded Employment Plan
Medical
Benefits
Rupees Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs in Lakhs

I. Expense recognised in the Profit and Loss Account

for the year ended 31st March, 2010

1. Current Service Cost 622.86 303.86 24.93 —

326.42 223.08 27.14 —

2. Interest Cost 70.58 272.52 44.03 47.58

36.76 264.81 36.51 44.19

3. Expected return on plan assets — (253.00) — —

— (145.96) — —

4. Cost of plan amendment — 48.16 159.59 —

— — — —

5. Actuarial (Gains) / Losses (72.23) 164.81 (19.79) 165.81

376.40 452.94 84.02 75.72

6. Difference in Exchange 7.45 — — —

— — — —

7. Total expense 628.66 536.35 208.76 213.39

739.58 794.87 147.67 119.91

II. Net Liability recognised in the Balance Sheet as

at 31st March, 2010
1. Present value of Defined Benefit Obligation as
at 31st March, 2010 1977.24 4344.08 791.63 813.69

1877.63 3893.12 629.01 679.67

2. Fair value of plan assets as at 31st March, 2010 — 4019.52 — —

— 3614.42 — —

3. Net liability as at 31st March, 2010 1977.24 324.57 791.63 813.69

1877.63 278.70 629.01 679.67

59
VOLTAS
Annual Report 2009-2010

SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

Gratuity Gratuity Post Pension

Unfunded Funded Employment Plan
Medical
Benefits
III. Change in Obligation during the Year ended Rupees Rupees Rupees Rupees
31st March, 2010 in Lakhs in Lakhs in Lakhs in Lakhs
1. Present value of Defined Benefit Obligation
at the beginning of the year 1877.63 3893.12 629.01 679.67
826.36 3310.10 521.62 631.30
2. Current Service Cost 622.86 303.86 24.93 —
326.42 223.08 27.14 —
3. Interest Cost 70.58 272.52 44.03 47.58
36.76 264.81 36.51 44.19
4. Actuarial (Gains)/Losses (72.23) 236.90 (19.79) 165.81
376.40 509.17 84.02 75.72
5. Cost of Plan Amendment — 48.16 159.59 —
— — — —
6. Benefits Payments (288.25) (410.48) (46.14) (79.37)
175.19 (414.04) (40.28) (71.54)
7. Difference in exchange (233.35) — — —
136.50 — — —
8. Present value of Defined Benefit
Obligation at the end of the year 1977.24 4344.08 791.63 813.69
1877.63 3893.12 629.01 679.67

IV. Change in Assets during the Year ended

31st March, 2010
1. Plan assets at the beginning of the year — 3614.42 — —
— 1824.47 — —
2. Expected return on plan assets — 253.00 — —
— 145.96 — —
3. Contributions by employers 288.25 490.48 46.14 79.37
175.19 2001.80 40.28 71.54
4. Actual benefits paid (288.25) (410.48) (46.14) (79.37)
175.19 (414.04) (40.28) (71.54)
5. Actuarial Gains / (Losses) — 72.09 — —
— 56.23 — —
6. Plan assets at the end of the year — 4019.51 — —
— 3614.42 — —
7. Actual return on plan assets (2+5) — 325.09 — —
— 202.19 — —

60
SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

Gratuity Gratuity Post Pension

Unfunded Funded Employment Plan
Medical
Benefits
Rupees Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs in Lakhs
V. Amount Recognised in the Balance Sheet
1. Opening Liability 1877.63 278.70 629.01 679.67
826.36 1485.63 521.62 631.30
2. Expenses as above (I) 628.66 536.35 208.76 213.39
739.58 794.87 147.67 119.91
3. Employers Contribution (288.25) (490.48) (46.14) (79.37)
— (2001.80) (40.28) (71.54)
4. Difference in exchange (240.80) — — —
311.69 — — —
5. Closing Net Liability 1977.24 324.57 791.63 813.69
1877.63 278.70 629.01 679.67

VI. Actuarial Assumptions

1. Mortality Table (LIC) 1994-96 1994-96 1994-96 1996-98
Ultimate
2. Discount Rate 5% 8% 8% 8%
4% - 5% 7% 7% 7%
3. Increase in Salary/Health Care Cost/Pension 5% 8% 8% 8%
5% 5% & 7% 5% 3.75%
4. Rate of Return on Plan Assets — 8% 8% 8%
4% - 5% 7% 7% 7%
Note : Figures in italics under I to VI are of the previous year.

Gratuity Gratuity
31-3-2009
% %
VII. Categories of plan assets as a percentage of the fair value of total plan assets
1. Government of India Securities 26 22
2. Corporate Bonds 65 68
3. Special Deposit Scheme 5 6
4. Others 4 4
100 100

VIII. Effect of Change in Assumed Health Care Cost 2008-09

Trend Rate Rupees in Lakhs Rupees in Lakhs
One One One One
percentage percentage percentage percentage
point point point point
increase decrease increase decrease

1. Effect on the aggregate of the service cost

and interest cost 68.21 66.28 64.74 62.57
2. Effect on defined benefit obligation 809.32 785.74 660.33 613.08

61
VOLTAS
Annual Report 2009-2010

SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

(a) The Actuarial calculations used to estimate defined benefit commitments and expenses are based on the above
assumptions which if changed would affect the defined benefit commitment’s size, the funding requirement and
expenses.

(b) The estimates of future salary increases, considered in the Actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
(c) The disclosure of Present value of Defined obligation, fair value of assets, surplus/(deficit) of assets and experience
adjustments of current year and preceding three years are as under:

Particulars 2008-09 2007-08 2006-07

Rupees Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs in Lakhs
1. Present Value of Defined benefit obligation 7926.64 7079.43 5289.38 3966.56
2. Fair Value of Planned Assets 4019.51 3614.42 1824.47 1232.06
3. Surplus or (Deficit) of the Plan 3907.13 3465.01 3464.91 2734.50
4. Experience Adjustment
- On Plan Assets 72.09 48.93 14.99 6.56
- On Plan Liabilities (11.32) 955.53 434.79 113.17
60.77 1004.46 449.78 119.73

(d) The details of the Company’s Defined benefit plans for its employees are given above which is certified by the actuary
and relied upon by the auditors.
(e) Expected contribution of Rs.784.65 Lakhs (2008-09 : Rs. 782 Lakhs) to Defined Benefits (other than Provident Fund) for
the next year.
(f ) The Company has recognised the following amounts in the Profit and Loss Account under the head Company’s
Contribution to Provident Fund and Other Funds :

2008-09
Particulars Rupees Rupees
in Lakhs in Lakhs
Provident Fund 756.95 797.38
Superannuation Fund 198.42 221.58
955.37 1018.96

(iii) Forwarding charges are net of Freight Recovery of Rs.428.43 Lakhs (2008-09 : Rs.474.71 Lakhs).
(iv) Other Expenses:
2008-09
Rupees Rupees
in Lakhs in Lakhs
Payment to Directors other than Wholetime Directors for Sitting Fees and Commission 176.10 95.80

13. Earnings per Share has been computed as under :

2008-09
Net profit (Rs.Lakhs) 34421.95 25258.90
Weighted average number of Equity Shares Outstanding 330884740 330884740
Earnings Per Share (Rs.) - Basic and Diluted 10.40 7.63
(Face Value of Re.1 per share)

62
SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

14. Derivative Instruments :

The Company has entered into the following derivative instruments :
(a) Forward Exchange Contracts (being a derivative instrument), which are not intended for trading or speculative purposes,
but for hedge purposes, to establish the amount of reporting currency required or available at the settlement date of
certain payables and receivables.
The following are the outstanding Forward Exchange Contracts entered into by the Company :

Currency Amt. in Lakhs Sell / Buy Cross Currency

US Dollar 65.00 Buy Rupees

(40.00) Buy Rupees

GB Pound 3.00 Buy QAR

1.10 Buy US Dollar

(Nil) — —

Euro 34.56 Buy QAR

(24.37) Buy US Dollar

The pro-rata difference between the forward contract rate and the exchange rate on the date of transaction to be
charged / (credited) to Profit and Loss Account is Rs. 4.35 Lakhs [2008-09 : Rs.(0.13) Lakh].

(b) The year end foreign currency exposures (estimated in US $) that have not been hedged by a derivative instrument or
otherwise are given below :
(i) Amounts receivable in foreign currency on account of the following :
- Export of goods Rs. 1458.99 Lakhs US$ 32.49 Lakhs
(Rs. 1039.06 Lakhs) (US$ 20.36 Lakhs)
- Overseas Operations Rs. 123750.95 Lakhs US$ 2740.28 Lakhs
(Rs. 136250.32 Lakhs) (US$ 2669.48 Lakhs)
(ii) Amounts payable in foreign currency on account of the following :
- Import of goods and services Rs. 3671.34 Lakhs US$ 81.77 Lakhs
(Rs. 4763.91 Lakhs) (US$ 93.34 Lakhs)
- Overseas Operations Rs. 94926.39 Lakhs US$ 2102.00 Lakhs
(Rs. 105470.55 Lakhs) (US$ 2066.43 Lakhs)
Note : Figures in brackets are of the previous year.

15. Estimated amount of contracts remaining to be executed on capital account and not provided for : Rs.1208.10 Lakhs
(31-3-2009 : Rs.1544.54 Lakhs). Advance paid against such contracts : Rs.642.02 Lakhs (31-3-2009 : Rs.706.25 Lakhs).
16. Contingent liabilities not provided for :
(a) Guarantees on behalf of other companies :
Limits Rs.7599.18 Lakhs (31-3-2009 : Rs.4692.93 Lakhs) against which amount outstanding was Rs.5648.60 Lakhs
(31-3-2009 : Rs.2076.26 Lakhs) against which a provision has been made for contingencies Rs. Nil (31-3-2009 : Rs.583.59 Lakhs).
(b) Claims against the Company not acknowledged as debts :
In respect of various matters aggregating Rs.25139.01 Lakhs (31-3-2009 : Rs.22615.80 Lakhs), net of tax
Rs.16594.26 Lakhs (31-3-2009 : Rs.14928.69 Lakhs) against which a provision has been made for contingencies
Rs.1125 Lakhs (31-3-2009 : Rs.1125 Lakhs). In respect of a contingent liability of Rs.4502.84 Lakhs
(31-3-2009 : Rs.4502.84 Lakhs) the Company has a right to recover the same from a third party.

63
VOLTAS
Annual Report 2009-2010

SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

2008-09
Rupees Rupees
in Lakhs in Lakhs
Taxes, Cesses and Duties (other than income tax) 16754.84 14612.75
Contractual matters in the course of business 4568.20 4187.08
Real Estate Disputes and Demands 3519.76 3519.76
Ex-employees matters 248.63 248.63
Others 47.58 47.58
25139.01 22615.80

(c) Income tax demands :

In respect of matters decided in Company’s favour by Appellate Authorities where the Department is in further appeal -
Rs.1295.63 Lakhs (31-3-2009 : Rs.350.06 Lakhs).
(d) Staff demands under adjudication : Amount indeterminate.
(e) Liquidated damages, except to the extent provided, for delay in delivery of goods : Amount indeterminate.

17. In respect of guarantees aggregating Rs. 87905.05 Lakhs (31-3-2009 : Rs. 88991.07 Lakhs) issued by Banks at the request of the
Company in favour of third parties, the Company has given security by way of hypothecation of a part of tangible movable
assets, book debts and stocks.

18. Amounts paid by the Company to Directors as remuneration for services rendered in any capacity (See Schedule ‘O’ for
Computation of Net Profit in accordance with Sections 198 and 309 of the Companies Act, 1956):

2008-09
Rupees Rupees
in Lakhs in Lakhs
Remuneration to the Managing Director (2008-09 : Managing Director) inclusive of contribution
to Provident Fund and other funds : Rs. 10.37 Lakhs (2008-09 : Rs. 8.75 Lakhs), estimated money
value of benefits : Rs. 24.49 Lakhs (2008-09: Rs.19.80 Lakhs) and commission : Rs.150 Lakhs
(2008-09: Rs. 100 Lakhs). It does not include provision for compensated absences and gratuity as 244.55 179.08
separate actuarial valuation for the Managing Director is not available.

19. (a) Auditors’ Remuneration:

2008-09
Rupees Rupees
in Lakhs in Lakhs
Audit Fees 55.00 45.00
Tax Audit Fees 16.50 13.50
Company Law Matters 0.30 0.60
Tax Matters 2.50 5.51
Other Services (Service Tax Rs.0.48 Lakh (2008-09 : Rs.0.13 Lakh) 69.48 52.68
Out of Pocket Expenses 3.11 1.25
146.89 118.54

[The above excludes Service Tax availed Rs.14.28 Lakhs (2008-09 : Rs.12.94 Lakhs)]

64
SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

2008-09
Rupees Rupees
in Lakhs in Lakhs
(b) Remuneration to Branch Auditors:
Audit Fees 21.64 18.24
Other Services 12.03 11.96
Out of Pocket Expenses 2.25 1.43
35.92 31.63

20. Assets under operating Leases :

(a) The Company has taken on operating lease certain assets. The total lease rent paid on the same amounts to Rs. 4433.68 Lakhs
(2008-09 : Rs.4423.37 Lakhs).
(b) The minimum future lease rentals payable in respect of non-cancellable lease are as under :
2008-09
Rupees Rupees
in Lakhs in Lakhs
Not later than one year 1376.51 1701.64
Later than one year but not later than five years 2276.32 3241.50
Later than five years 67.48 296.84
(c) The Company has given on operating lease certain assets. The total lease rent received on the same amounting Rs. 3067.79 Lakhs
(2008-09 : Rs. 2551.24 Lakhs) is included under Other Income.
(d) The minimum future lease rentals receivable in respect of non-cancellable lease are as under :

2008-09
Rupees Rupees
in Lakhs in Lakhs
Not later than one year 2968.37 2181.13
Later than one year but not later than five years 5270.63 3546.00
Later than five years 1732.35 581.59
(e) The Original Cost, Depreciation for the year and Written Down Value are Rs.1307.78 Lakhs, Rs. 31.10. Lakhs and
Rs. 847.33 Lakhs (2008-09 : Rs. 1474.54 Lakhs, Rs. 30.91 Lakhs and Rs. 962.35 Lakhs), respectively.
21. In respect of certain property transactions, conveyance deed are pending, as under:
(a) In terms of agreement dated 30th September, 1998, Company’s Refrigerators manufacturing facility at Nandalur was
transferred on a running business / going concern basis to Electrolux Voltas Limited (EVL) on the close of the business
hours on 31st March, 1999. In respect of land for the Nandalur Plant, Deed of Conveyance is pending completion.
(b) The Company had accounted in 1999-2000, the profit on transfer of development rights of Rs.734.12 Lakhs in respect
of property at Lalbaug, Mumbai for which agreement for assignment was executed and clearance from the Income Tax
Department under Section 269 UC of the Income Tax Act, 1961 was received but for which conveyance formalities are
pending completion.
(c) The Company had accounted in 2003-04, the profit on transfer of development rights of Rs.1735.95 Lakhs in respect
of property at Thane and Rs.2145.53 Lakhs in respect of property at Pune for which agreements were executed and
consideration received but for which conveyance formalities are pending completion.
(d) The Company had accounted in 2004-05, the profit on transfer of development rights of Rs.505.53 Lakhs in respect of
property at Thane for which agreement was executed and consideration received but for which conveyance formalities
are pending completion.
(e) The Company had accounted in 2006-07, the profit on transfer of development rights in respect of Upvan land and
Henkel Switchgear Limited approach land at Thane for which agreements were executed and consideration received
(Rs. 2070 Lakhs and Rs.223.40 Lakhs, respectively) but for which conveyance formalities are pending completion.
(f ) The Company had accounted in 2007-08, the profit on transfer of development rights in respect of land adjoining Simtools
at Thane for which an Agreement was executed and consideration received (Rs.919.96 Lakhs) but for which conveyance
formalities are pending completion.
(g) The Company has accounted in 2009-10 the profit on transfer of development rights in respect of Nala land at Thane for
which an Agreement was executed and consideration received Rs.238.18 Lakhs but for which conveyance formalities are
pending completion.

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SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

22. Remittance in foreign currencies for dividends :

The Company has not remitted any amount in foreign currencies on account of dividends during the year and does not have
information as to the extent to which remittances, if any, in foreign currencies on account of dividends have been made by / on
behalf of non-resident shareholders. The particulars of dividends payable to non-resident shareholders which were declared
during the year, are as under :
2008-09
(i) Number of non-resident shareholders 2107 1694
(ii) Number of Equity shares held by them 3813322 3846891
(iii) Gross amount of dividend (Rs.) 6101315.20 5193302.85
(iv) Year ended to which the dividend related March-2009 March-2008

23. Earnings in foreign exchange received in India :

2008-09
Rupees Rupees
in Lakhs in Lakhs
(a) F.O.B. Value of exports 3476.02 2638.43
(including amounts invoiced against work-in-progress)
(b) Service Commission (On Cash basis) 1769.26 3252.45
(c) Other Income 622.02 735.83
(d) Foreign Projects Profit 22601.93 13323.01
(e) Warranty Recovery 187.55 89.03

24. Expenditure (subject to deduction of tax wherever applicable) in foreign currency from India :
2008-09
Rupees Rupees
in Lakhs in Lakhs
Royalty 17.74 30.23
Other matters 163.32 314.51

25. Value of Imports on C.I.F. basis :

2008-09
Rupees Rupees
in Lakhs in Lakhs
Raw Materials 1592.17 2485.94
Finished Goods 38907.21 42535.86
Components & Spares 15647.82 6974.27
Capital Goods 110.99 52.39

26. Information in regard to Raw Materials and Components consumed :

(a) Items Unit of 2008-09 2008-09
Measurement Quantity Quantity Value Value
Rupees Rupees
in Lakhs in Lakhs
Steel/Ferrous Metals M.Tonnes 4525.91 6108 2577.36 3070.67
Non-Ferrous Metals M.Tonnes 760 641 2388.64 2373.48
Compressors Numbers 139078 75362 5197.77 3789.87
Others (Items individually not
exceeding 10% of total) 20695.00 21593.58
30858.77 30827.60

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SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

(b) 2008-09 2008-09

% to Value % to Value
total Rupees total Rupees
Consumption in Lakhs Consumption in Lakhs
Imported 19.96 6158.09 19.58 6036.48
Indigenous 80.04 24700.68 80.42 24791.12
100.00 30858.77 100.00 30827.60

27. Quantitative information in regard to Licensed Capacity, Installed Capacity and Actual Production of the goods manufactured
by the Company :
Installed Installed Actual Actual
Capacity Capacity Production Production
2008-09 2008-09
Air Conditioners and Water Coolers:
Airconditioners for Specialised Applications (Numbers) 2000 2000 1107 1622
Water Coolers (Numbers) 45000 45000 27686 19238
Freezers and Bottle Coolers (Numbers) 75000 75000 75840 44628
Open Type Compressors with Accessories (Numbers) 1000 1000 355 410
Packaged Airconditioners (Numbers) 18000 18000 7710 10193
Package Chillers (Numbers) 980 980 590 694
Semi Hermetic Compressors (Numbers) 3600 3600 694 1003
Vapour Absorption Machine (Numbers) 75 135 46 36
Air Handling Unit (Numbers) 2400 2400 1459 909
Materials Handling Equipment:
Forklift Trucks (Numbers) 2000 2000 1160 1315
Hydraulic Truck Cranes (Numbers) 50 50 6 20
Warehouse Equipment (Numbers) 150 150 56 39
Construction and Mining Equipment:
Crushers (Numbers) 10 10 15 16

Notes:
(i) As per the Industrial Policy declared in July 1991 and as amended in April 1993, no licenses are required for the products
manufactured by the Company.
(ii) Installed capacities are as certified by the Management and relied upon by the Auditors. These are alternative and not
cumulative and as such production is not strictly comparable with the same.
(iii) Production includes for captive consumption.

28. Information in regard to Purchases, Sales, Opening Stocks and Closing Stocks:
(A). Purchases (Other than Raw Materials and Components) and Sales :
Class of Goods Purchases Sales
Unit of Quan- Quan- Rupees Rupees Quan- Quan- Rupees Rupees
Measure- tity tity in Lakhs in Lakhs tity tity in Lakhs in Lakhs
ment 2008-09 2008-09 2008-09 2008-09
Airconditioners and Water Coolers
Room Airconditioners Numbers 560205 340834 71003.14 49436.95 485798 367644 89711.87 68247.56
Including C.U.’s
Airconditioners for Numbers Nil Nil Nil Nil 1071 1657 1030.80 1265.48
Specialised Applications
Water Coolers Numbers 84347 48559 2835.61 1678.73 81583 74076 8368.18 7391.07
Refrigerators Numbers Nil Nil Nil Nil 3 20 0.07 0.45

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SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

28(A). Purchases (Other than Raw Materials and Components) and Sales (contd.) :
Class of Goods Purchases Sales
Unit of Quan- Quan- Rupees Rupees Quan- Quan- Rupees Rupees
Measure- tity tity in Lakhs in Lakhs tity tity in Lakhs in Lakhs
ment 2008-09 2008-09 2008-09 2008-09
Freezers and Bottle Coolers Numbers 738 94 54.49 21.76 73052 49976 11001.78 7402.83
Compressors Numbers 271672 14699 9645.27 182.45 254800 14699 9286.67 197.21
Indoor Unit Numbers 123919 Nil 4703.82 Nil 105761 Nil 4389.82 Nil
Airconditioning and Refrigeration
Turnkey jobs Number 1015 1116 63049.23 75777.92
of jobs
Packaged Airconditioners Numbers 6204 6863 4251.43 5077.02
Package Chillers Numbers 445 523 4282.90 4951.41
Vapour Absorption
Machines Numbers 37 32 1622.68 1635.78
Air Handling Units (A.H.U.) Numbers 235 243 548.42 352.79
Sundry Equipment for
Airconditioning and
Refrigeration, Consumer
Durables and Spare Parts 5822.77 3270.27 8271.85 5239.83
(Refer Note below)
Materials Handling
Equipment and Spares
Forklift Trucks Numbers 3 25 20.84 292.76 1175 1321 10106.79 12730.17
Warehousing Equipment Numbers Nil Nil Nil Nil 44 40 192.32 198.05
Sundry Material
Handling Eqpt., Spares
for Forklift Trucks, etc. 1087.66 1395.11 2092.87 2216.70
(Refer Note below)
Hydraulic Truck Cranes Numbers 15 Nil 143.72 Nil 20 20 502.36 2087.61
Machine Tools
Machine Tools, Accessories
and Sundry Equipment 2.36 8.02 2.18 17.62
Pollution Control
Equipment and Systems
Water Pollution Control
Equipment and Systems 897.89 949.25 1435.93 1309.17
Construction and Mining Equipment
Excavators Numbers Nil 23 Nil 3157.22 2 35 75.62 3807.81
Crushers Numbers 8 61 1184.30 10956.44 50 55 7625.78 8227.98
Screening Equipment Numbers 8 72 591.45 7174.64 36 47 3716.97 4726.66
Dumper Numbers Nil 3 Nil 442.74 Nil 3 Nil 444.00
Accessories and Spares
for Drilling and Mining 5647.82 6094.88 12109.93 7357.53
Textile Machinery and Equipment 2911.93 2633.54 3707.92 3311.35
(Refer Note below)
Pesticides and Chemicals
Chemicals and Minerals Nil 3321.48 Nil 3679.51
Agro Industrial Products
Hydraulic Pumps, Motors, and
Other Agro Industrial Products 53.29 79.86 315.40 402.02
Others
Turnkey Contracts 177988.89 153650.63
Camera Numbers 617 418 6.03 1.26 6 146 1.54 1.33
Room Heaters Numbers Nil 2 Nil 0.01
Services Rendered 30817.33 25317.00
106612.39 91097.36 456507.53 407024.50

Note : Spare parts and sundry equipment purchased are either used for internal service / warranty or for sales. The purchases
disclosed above are to the extent of sales made during the year.

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SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

28(B). Opening and Closing Stocks :

Class of Goods Opening Stock Closing Stock
Unit of Quan- Quan- Rupees Rupees Quan- Quan- Rupees Rupees
Measure- tity tity in Lakhs in Lakhs tity tity in Lakhs in Lakhs
ment 2008-09 2008-09 2008-09 2008-09
Airconditioners and Water Coolers
Room Airconditioners Numbers 83505 110610 10692.75 13771.79 156550 83505 17308.75 10692.75
Water Coolers Numbers 6396 12741 540.81 945.10 35646 6396 1705.47 540.81
Airconditioners for
Specialised Applications Numbers 57 93 98.84 218.58 93 57 115.15 98.84
Refrigerators Numbers 11 32 0.23 0.92 8 11 0.17 0.23
Freezers and Bottle Coolers Numbers 3799 9114 365.43 1061.34 6982 3799 912.23 365.43

Packaged Airconditioners Numbers 588 632 289.07 332.38 665 588 420.65 289.07
Package Chillers Numbers 45 33 426.87 304.93 52 45 575.29 426.87
Vapour Absorption Machines Numbers 3 1 148.85 20.64 10 3 557.74 148.85
Air Handling Units (A.H.U.) Numbers 61 40 151.62 74.14 102 61 289.18 151.62
Sundry Equipment for
Airconditioning and Refrigeration,
Consumer Durables and Spare Parts 2023.81 2327.61 3219.61 2023.81
Compressors Numbers 16872 604.36
Indoor Unit Numbers 18123 520.31
Materials Handling Equipment
and Spares
Forklift Trucks Numbers 26 7 217.15 69.19 12 26 139.05 217.15
Warehousing Equipment Numbers 1 2 3.18 6.69 12 1 47.88 3.18
Sundry Material Handling Eqpt.,
Spares for Forklift Trucks, etc. 94.80 51.46 21.13 94.80
Hydraulic Truck Cranes Numbers Nil Nil Nil Nil 1 Nil 9.55 Nil
Machine Tools
Machine Tools, Accessories
and Sundry Equipment 1.95 0.45 Nil 1.95
Pollution Control Equipment
and Systems
Electrostatic Precipitators,
Mechanical Dust Collectors, etc.
- Components and Parts 135.58 24.90 161.80 135.58
Construction and Mining Equipment
Excavators Numbers 2 14 79.00 468.00 Nil 2 Nil 79.00
Crushers Numbers 31 9 5558.00 692.68 4 31 488.28 5558.00
Sundry Screening Equipments Numbers 37 12 3505.00 683.06 9 37 545.44 3505.00
Sundry Equipment, Accessories and
Spares for Drilling and Mining 4002.33 2578.27 5209.17 4002.33
Textile Machinery and Equipment 361.63 370.52 315.27 361.63
Chemicals
Chemicals and Minerals Nil 274.51 Nil Nil
Others
Camera Numbers 675 702 4.90 4.75 1030 675 9.53 4.90
Room Heaters Numbers 18 22 0.36 0.44 16 18 0.21 0.36
28702.16 24282.35 33176.22 28702.16

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SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

28(B). Quantities of finished goods capitalised/(decapitalised), scrapped, issued against schemes and / or transferred to jobs during
the year.
Unit of Quantity Quantity
Measurement 2008-09
Room Airconditioners Numbers 1362 295
Water Coolers Numbers 1200 66
Refrigerators Numbers Nil 1
Airconditioners for Specialised Applications Numbers Nil 1
Freezers and Bottle Coolers Numbers 343 61
Camera Numbers 256 299
Room Heaters Numbers 2 2
Packaged Airconditioners Numbers 1429 3374
Package Chillers Numbers 138 159
Vapour Absorption Machines Numbers 2 2
Forklift Trucks Numbers 2 Nil
Warehouse Equipment Numbers 1 Nil
Air Handling Unit (A.H.U.) Numbers 1183 645
Indoor Unit Numbers 35 Nil

29. In compliance with the Accounting Standard 27 - ‘Financial Reporting of Interests in Joint Ventures’ (AS-27) as notified by the Companies
(Accounting Standards) Rules, 2006, the Company has interests in the following jointly controlled entities and operations :

Rupees in Lakhs
As at 31st March, 2010 Year ended
31st March, 2010
Name of the Joint Venture / % Assets Liabilities Contingent Capital Income Expenses
Operations Holding Liabilities Commitment
Universal Comfort Products 50 Nil Nil Nil Nil Nil Nil
Private Limited (Note 1) (Nil) (Nil) (Nil) (Nil) (4014.74) (4264.49)
Universal Weathermaker Factory 49 685.60 148.73 Nil Nil 858.82 798.62
L.L.C. (970.80) (704.50) (Nil) (Nil) (0.29) (62.58)
Lalbuksh Voltas Engineering 49 3403.28 1284.38 469.80 Nil 3728.86 2789.41
Services & Trading L.L.C. (2898.26) (1359.22) (275.06) (Nil) (2894.30) (2476.58)
*Universal Voltas L.L.C. 49 5022.73 3807.54 3819.10 Nil 9362.36 8383.44
(5551.69) (4580.22) (3523.43) (Nil) (7855.64) (7173.43)
*Saudi Ensas Company for 49 Nil Nil Nil Nil Nil Nil
Engineering Services W.L.L. (Note 1) (Nil) (Nil) (Nil) (Nil) (684.52) (1382.49)
Naba Diganta Water Management 26 1176.83 224.33 Nil 272.90 Nil 3.49
Limited (337.84) (229.54) (Nil) (1108.02) (Nil) (3.67)
ETA-Voltas - Hitachi Plant 37.50 12681.67 10348.14 4466.28 Nil 13789.94 14707.08
(11436.50) (7816.22) (5398.73) (Nil) (19737.68) 19826.94)
NDIA Package 77.08 1481.70 1184.64 1714.00 Nil 2018.33 1921.06
19 Project (1663.37) (1422.93) (1017.00) (Nil) (786.66) (599.28)
Sidra Medical & Research 51.08 12906.70 11994.31 19344.00 Nil 11270.78 10167.12
Centre Project (11551.09) (11436.50) (21840.00) (Nil) (3041.84) (2738.12)
* As the accounting year of these companies ends on 31st December, 2009, the figures are as of that date.

Notes: (i) Universal Comfort Products Private Ltd (UCPL) and Saudi Ensas Company for Engineering Services W.L.L. (SECL)
ceased to be a joint venture company on acquisition of 50% shareholding in UCPL and 51% shareholding in SECL
with effect from 17th June, 2008 and 28th January, 2009, respectively.
(ii) Figures in brackets are of the previous year.

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SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

30. Segmental Reporting :

Segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standard (AS-17) on
Segment Reporting as notified under the Companies (Accounting Standards) Rules, 2006.
31. Related Party Disclosures :
(a) List of Related Parties and Relationships :
Party Relation
A. Simto Investment Company Ltd. Subsidiary
Auto Aircon (India) Ltd .
Metrovol FZE
VIL Overseas Enterprises B.V.
Voice Antilles N.V.
Weathermaker Ltd.
Saudi Ensas Company for Engineering Services W.L.L. (w.e.f. 28-1-2009)
Rohini Industrial Electricals Ltd. (w.e.f. 4-9-2008)
Universal Comfort Products Ltd. (w.e.f. 17-6-2008)
Agro Foods Punjab Ltd. (Under liquidation)
Westerwork Engineers Ltd. (Under liquidation)
B. Brihat Trading Private Ltd. Associate
Terrot GmbH (upto 20-3-2009)
C. Universal Voltas L.L.C. Joint Venture
Lalbuksh Voltas Engineering Services & Trading L.L.C.
Naba Diganta Water Management Ltd.
Universal Weathermaker Factory L.L.C. (w.e.f. 26-4-2008)
Universal Comfort Products Private Ltd. (upto 16-6-2008)
Saudi Ensas Company for Engineering Services W.L.L. (upto 27-1-2009)
AVCO Marine S.a.S. (Under liquidation)
Agrotech Industries Ltd. (Under closure)
D. Tata Sons Ltd. Promoters holding together with its subsidiary
is more than 20%
E. Mr. A. Soni - Managing Director Key Management Personnel

31(b). Related Party Transactions : (contd.):

Rupees in Lakhs
Transactions Subsidiaries Associates Key Promoter Total
and Management
Joint Ventures Personnel
Purchase of Goods [Refer 31 (c) (1)] 31136.28 1596.76 — — 32733.04
(3910.36) (8366.26) (—) (—) (12276.62)

Sale of Goods [Refer 31 (c) (2)] 15042.60 447.30 — 5.02 15494.92

(1514.54) (229.45) (—) (4.36) (1748.35)

Service Income [Refer 31 (c) (3)] 3.00 399.77 — 0.84 403.61

(12.58) (272.18) (—) (5.22) (289.98)

Interest Income [Refer 31 (c) (4)] 164.96 — — — 164.96

(4.00) (—) (—) (—) (4.00)

Rental Income [Refer 31 (c) (5)] — — — 0.94 0.94

(—) (—) (—) (1.45) (1.45)

Dividend Income [Refer 31 (c) (6)] 169.81 52.46 — — 222.27

(426.48) (41.52) (—) (—) (468.00)

Freight Recovery [Refer 31 (c) (7)] 11.65 — — — 11.65

(32.07) (32.56) (—) (—) (64.63)

Advertising Recovery [Refer 31 (c) (8)] 36.56 — — — 36.56

(124.39) (134.50) (—) (—) (258.89)

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SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

31(b). Related Party Transactions : (contd.):

Rupees in Lakhs
Transactions Subsidiaries Associates Key Promoter Total
and Management
Joint Ventures Personnel
Commission Received [Refer 31 (c) (9)] 122.85 — — — 122.85
(152.32) (214.77) (—) (—) (367.09)

Write back of provision for Contingencies 783.59 — — — 783.59

[Refer 31 (c) (10)]
(—) (—) (—) (—) (—)

Remuneration Paid / Payable [Refer 31 (c) (11)] — — 244.55 — 244.55

(—) (—) (179.08) (—) (179.08)

Dividend Paid [Refer 31 (c) (12)] — — — 1259.71 1259.71

(—) (—) (—) (1062.88) (1062.88)

Provision / Write off of Debts and Advances 911.00 — — — 911.00

[Refer 31 (c) (13)]
(0.50) (—) (—) (—) (0.50)

Tata Brand Equity [Refer 31 (c) (14)] — — — 679.72 679.72

(—) (—) (—) (610.19) (610.19)

Other Operating and Administration Expenses - 6.29 — — — 6.29

Received/Receivable [Refer 31 (c) (15)
(1.82) (0.54) (—) (—) (2.36)

Other Operating and Administration 0.24 — — 48.86 49.10

Expenses - Paid/Payable [Refer 31 (c) (16)]
(53.08) (—) (—) (70.84) (123.92)

Advance Share Application Money given 1054.48 — — — 1054.48

[Refer 31 (c) (17)]
(134.69) (1006.94) (—) (—) (1141.63)

Purchase of Fixed Assets [Refer 31 (c) [18)] 10.53 — — — 10.53

(—) (—) (—) (—) (—)

Investments [Refer 31 (c) (19)] 2355.67 366.60 — — 2722.27

(6645.73) (409.89) (—) (—) (7055.62)

Advances given [Refer 31 (c) (20)] 1.00 — — 0.46 1.46

(1251.50) (—) (—) (—) (1251.50)

Intercorporate Deposits Placed 4000.00 — — — 4000.00

[Refer 31 (c) (21)]
(—) (—) (—) (—) (—)

Refund of Share Application Money — — — — —

[Refer 31 (c) (22)]
(—) (432.50) (—) (—) (432.50)

Warranty Recovery [Refer 31 (c) (23)] 5.78 — — — 5.78

(16.82) (17.05) (—) (—) (33.87)

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SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

31(b). Related Party Transactions : (contd.):

Rupees in Lakhs
Transactions Subsidiaries Associates Key Promoter Total
and Management
Joint Ventures Personnel
Provision for Debts and Advances Due as on 1285.34 — — — 1285.34
31-3-2010 [Refer 31 (c) (24)]
(374.34) (—) (—) (—) (374.34)

Advance Outstanding as on 31-3-2010 172.87 — — — 172.87

[Refer 31 (c) (25)]
(1328.61) (—) (—) (—) (1328.61)

Advance Share Application Money as on 2312.78 — — — 2312.78

31-3-2010 [Refer 31 (c) (26)]
(1348.10) (—) (—) (—) (1348.10)

Debit Balance Outstanding as on 31-3-2010 1241.94 99.58 — — 1341.52

[Refer 31 (c) (27)]
(485.32) (41.01) (—) (—) (526.33)

Credit Balance Oustanding as on 31-3-2010 388.92 600.49 — 677.91 1667.32

[Refer 31 (c) (28)]
(500.31) (350.63) (—) (591.91) (1442.85)

Intercorporate Deposits as on 31-3-2010 4000.00 — — — 4000.00

[Refer 31 (c) (29)]
(—) (—) (—) (—) (—)
Note : Figures in bracket are of previous year.

31(c). Details of material (more than 10% of the total related party transactions of the same type) transactions with Related Party: (contd.):
Rupees In Lakhs
Name of Party Transaction Value Transaction Value
2008-09
1. Purchase of Goods
Universal Comfort Products Ltd. 30583.92 10742.80
2. Sale of Goods
Naba Diganta Water Management Ltd. — 226.55
Universal Comfort Products Ltd. 15036.38 1462.88
3. Service Income
Universal Voltas L.L.C. 335.27 267.83
Universal Weathermaker Factory L.L.C. 64.50 —
4. Interest Income
Saudi Ensas Company for Engineering Services W.L.L. — 4.00
Rohini Industrial Electricals Ltd. 43.84 —
Universal Comfort Products Ltd. 120.00 —
5. Rental Income
Tata Sons Ltd. 0.94 1.45
6. Dividend Income
Weathermaker Ltd. — 264.30
Metrovol FZE 65.21 58.30
VIL Overseas Enterprises B.V. 104.60 103.88
Lalbuksh Voltas Engineering Services & Trading L.L.C. 52.46 —

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SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

31(c). Details of material (more than 10% of the total related party transactions of the same type) transactions with Related Party: (contd.):
Rupees In Lakhs
Name of Party Transaction Value Transaction Value
2008-09
7. Freight Recovery
Universal Comfort Products Ltd. 11.65 64.63
8. Advertising Recovery
Universal Comfort Products Ltd. 36.56 258.89
9. Commission Received
Universal Comfort Products Ltd. 122.85 324.64
Terrot GmbH — 42.45
10. Write back of provision for Contingencies
Saudi Ensas Company for Engineering Services W.L.L. 783.59 —
11. Remuneration Paid / Payable
Mr. A.Soni - Managing Director 244.55 179.08
12. Dividend Paid
Tata Sons Ltd. 1259.71 1062.88
13. Provision / Write off of Debts and Advances
Saudi Ensas Company for Engineering Services W.L.L. 910.00 —
Auto Aircon (India) Ltd. — 0.50
14. Tata Brand Equity
Tata Sons Ltd. 679.72 610.19
15. Other Operating and Administration Expenses - Received / Receivable
Lalbuksh Voltas Engineering Services & Trading L.L.C. — 0.49
Weathermaker Ltd. — 1.73
Universal Comfort Products Ltd. 6.29 —
16. Other Operating and Administration Expenses - Paid / Payable
Metrovol FZE — 53.08
Tata Sons Ltd. 48.86 70.84
17. Advance Share Application Money given
Saudi Ensas Company for Engineering Services W.L.L. 1054.48 1141.62
18. Purchase of Fixed Assets
Universal Comfort Products Ltd. 10.53 —
19. Investments
Rohini Industrial Electricals Ltd. 2355.57 6332.92
Naba Diganta Water Management Ltd. 366.60 —
20. Advances given
Auto Aircon (India) Ltd. 1.00 —
Tata Sons Ltd. 0.46 —
Universal Comfort Products Ltd. — 1156.75

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SCHEDULE ‘P’ : NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

31(c). Details of material (more than 10% of the total related party transactions of the same type) transactions with Related Party: (contd.):
Rupees In Lakhs
Name of Party Transaction Value Transaction Value
2008-09
21. Intercorporate Deposits Placed
Rohini Industrial Electricals Ltd. 1000.00 —
Universal Comfort Products Ltd. 3000.00 —
22. Refund of Share Application Money
Universal Comfort Products Ltd. — 432.50
23. Warranty Recovery
Universal Comfort Products Ltd. 5.78 33.87
24. Provision for Debts and Advances Due as on 31-3-2010
Saudi Ensas Company for Engineering Services W.L.L. 1206.74 296.74
Auto Aircon (India) Ltd. — 77.60
25. Advance Outstanding as on 31-3-2010
Universal Comfort Products Ltd. — 1156.74
Auto Aircon (India) Ltd. 78.60 77.60
Saudi Ensas Company for Engineering Services W.L.L. 94.27 94.27
26. Advance Share Application Money as on 31-3-2010
Saudi Ensas Company for Engineering Services W.L.L. 2312.78 1348.10
27. Debit Balance Outstanding as on 31-3-2010
Universal Comfort Products Ltd. 1158.49 485.84
28. Credit Balance Oustanding as on 31-3-2010
Tata Sons Ltd. 677.91 591.91
Weathermaker Ltd. 232.94 500.31
Universal Voltas L.L.C. 390.14 350.63
Universal Weathermaker Factory L.L.C. 210.35 —
29. Intercorporate Deposits as on 31-3-2010
Rohini Industrial Electricals Ltd. 1000.00 —
Universal Comfort Products Ltd. 3000.00 —
32. Figures for the previous year have been regrouped, wherever necessary.
For and on behalf of the Board

Chairman Ishaat Hussain

Managing Director Sanjay Johri
Directors Nasser Munjee
N. J. Jhaveri
Ravi Kant
N. D. Khurody
N. N. Tata
J. S. Bilimoria
S. N. Menon
Nani Javeri
Executive Vice President (Finance) M. M. Miyajiwala
General Manager - Taxation
& Company Secretary V. P. Malhotra
Mumbai, 28th May, 2010

75
VOLTAS
Annual Report 2009-2010

Balance Sheet Abstract and Company’s General Business Profile pursuant to Part IV
of Schedule VI to the Companies Act, 1956.

I. Registration Details:
Registration No. L 2 9 3 0 8 M H 1 9 5 4 P L C 0 0 9 3 7 1 State Code 1 1
Balance Sheet Date 3 1 0 3 2 0 1 0
Date Month Year
II. Capital Raised during the year (Amount in Thousands):
Public Issue Rights Issue
N I L N I L
Bonus Issue Private Placement
N I L N I L
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands):
Total Liabilities Total Assets
1 0 1 4 3 8 9 7 1 0 1 4 3 8 9 7

Sources of Funds
Paid-up Capital Reserves & Surplus
3 3 0 7 3 7 9 6 2 1 5 1 5

Secured Loans Unsecured Loans

1 9 0 8 0 6 N I L

Application of Funds
Net Fixed Assets Investments
1 7 4 6 8 2 6 3 3 9 9 6 6 6

Net Current Assets Deferred Tax Asset (Net)

4 8 0 6 2 1 9 1 9 0 3 4 7

Misc. Expenditure Accumulated Losses

N I L N I L

IV. Performance of the Company (Amount in Rs. Thousands):

Turnover Total Expenditure
4 5 6 5 0 7 5 3 4 0 7 9 4 3 5 8
Profit Before Tax Profit After Tax
4 8 5 6 3 9 5 3 4 4 2 1 9 5
Earnings Per Share in Rs. Dividend Rate %
1 0 2 0 0
V. Generic Name of Three Principal Products / Services of the Company (as per Monetary Terms) :
Item Code No. (ITC Code) 8 4 1 5 1 0 9 0
Product Description A I R C O N D I T I O N I N G M A C H I N E S

Item Code No. (ITC Code) 8 4 1 8 6 9 9 0

Product Description R E F R I G E R A T I N G E Q U I P M E N T
A B S O R P T I O N H E A T P U M P S &
C H I L L E R P A C K A G E

Item Code No. (ITC Code) 8 4 2 7 2 0 0 0 / 8 4 2 7 1 0 0 0

Product Description F O R K L I F T T R U C K S
D I E S E L / E L E C T R I C
76
 AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS
To the Board of Directors of Voltas Limited
1. We have audited the attached Consolidated Balance
Sheet of VOLTAS LIMITED (“the Company”), its
subsidiaries and jointly controlled entities (the
Company, its subsidiaries and jointly controlled
entities constitute “the Group”) as at 31st March, 2010,
the Consolidated Profit and Loss Account and the
Consolidated Cash Flow Statement of the Group for
the year ended on that date, both annexed thereto. The
Consolidated Financial Statements include investments
in jointly controlled entities accounted in accordance
with Accounting Standard 27 (Financial Reporting
of Interests in Joint Ventures) as notified under the
Companies (Accounting Standards) Rules, 2006. These
financial statements are the responsibility of the
Company’s Management and have been prepared
on the basis of the separate financial statements and
other financial information regarding components.
Our responsibility is to express an opinion on these
Consolidated Financial Statements based on our audit.
2. We conducted our audit in accordance with the
auditing standards generally accepted in India. Those
Standards require that we plan and perform the audit
to obtain reasonable assurance about whether the
financial statements are free of material misstatements.
An audit includes examining, on a test basis, evidence
supporting the amounts and the disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and the significant estimates
made by the Management, as well as evaluating the
overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
3. We did not audit the financial statements of Qatar,
Bahrain and United Arab Emirates (UAE) Branches, certain
subsidiaries and joint ventures, whose financial statements
reflect total assets of Rs. 36996.83 lakhs as at 31st March,
2010, total revenues of Rs. 177040.67 lakhs and net cash
inflows amounting to Rs. 10556.39 lakhs for the year
ended on that date as considered in the Consolidated
77
Financial Statements. These financial statements have
been audited by other auditors whose reports have been
furnished to us and our opinion, in so far as it relates
to the amounts included in respect of these branches,
subsidiaries and joint ventures is based solely on the
reports of the other auditors.
4. We report that the Consolidated Financial Statements
have been prepared by the Company in accordance
with the requirements of Accounting Standard 21
(Consolidated Financial Statements) and Accounting
Standard 27 (Financial Reporting of Interests in Joint
Ventures) as notified under the Companies (Accounting
Standards) Rules, 2006.
5. Based on our audit and on consideration of the separate
audit reports on individual financial statements of the
Company, its branches, subsidiaries and joint ventures
and to the best of our information and according to the
explanations given to us, in our opinion, the Consolidated
Financial Statements give a true and fair view in
conformity with the accounting principles generally
accepted in India:
(i) in the case of the Consolidated Balance Sheet, of the
state of affairs of the Group as at 31st March, 2010;
(ii) in the case of the Consolidated Profit and Loss
Account, of the profit of the Group for the year
ended on that date; and
(iii) in the case of the Consolidated Cash Flow
Statement, of the cash flows of the Group for the
year ended on that date.
For Deloitte Haskins & Sells
Chartered Accountants
(Registration No.117366W)
Nalin M. Shah
Hyderabad, Partner
28th May, 2010 Membership No. 15860
VOLTAS
Annual Report 2009-2010

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2010

As at
31-3-2009
Schedule Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs
SOURCES OF FUNDS
SHAREHOLDERS FUNDS
1. SHARE CAPITAL A 3307.37 3307.34
2. RESERVES AND SURPLUS B 105209.49 75667.62
3. TOTAL 108516.86 78974.96
4. MINORITY INTEREST 1386.34 1590.44
LOAN FUNDS
5. SECURED LOANS C 3062.65 16876.05
6. UNSECURED LOANS D 454.39 1267.79
7. DEFERRED TAX LIABILITY (Net) (See Note 7, Schedule 'M') 15.21 Nil
TOTAL 113435.45 98709.24

APPLICATION OF FUNDS
8. FIXED ASSETS
GROSS BLOCK E 38897.55 39862.11
LESS : DEPRECIATION 18211.46 18385.29
NET BLOCK 20686.09 21476.82
CAPITAL WORK-IN-PROGRESS 1934.31 1323.87
22620.40 22800.69
9. GOODWILL ON CONSOLIDATION 7638.62 6753.57
10. INVESTMENTS F 23394.37 15624.69
11. DEFERRED TAX ASSET (Net) (See Note 7, Schedule 'M') 2038.95 2239.88
12. CURRENT ASSETS, LOANS AND ADVANCES G
1. Inventories 114409.00 111938.78
2. Sundry Debtors 100597.33 95208.69
3. Cash and Bank balances 46890.85 45705.42
4. Loans and Advances 20776.83 22033.72
282674.01 274886.61
13. LESS : CURRENT LIABILITIES AND PROVISIONS H
(A) Current Liabilities 198479.90 197427.60
(B) Provisions 26451.00 26168.60
224930.90 223596.20
14. NET CURRENT ASSETS 57743.11 51290.41
TOTAL 113435.45 98709.24

(For notes forming part of the Accounts see Schedule ’M’. For and on behalf of the Board
The Schedules referred to above form an integral part of the Accounts)
Chairman Ishaat Hussain
Managing Director Sanjay Johri
Directors Nasser Munjee
In terms of our report attached. N. J. Jhaveri
Ravi Kant
For Deloitte Haskins & Sells N. D. Khurody
Chartered Accountants N. N. Tata
J. S. Bilimoria
S. N. Menon
Nani Javeri
Executive Vice President (Finance) M. M. Miyajiwala
Nalin M. Shah General Manager - Taxation
Partner & Company Secretary V. P. Malhotra
Hyderabad, 28th May, 2010 Mumbai, 28th May, 2010
78
 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010

Year ended
31st March,
2009
Schedule Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs
1. SALES AND SERVICES 483024.53 437390.94
Less : EXCISE DUTY 2436.14 4801.16
NET SALES AND SERVICES 480588.39 432589.78
2. OTHER INCOME I 7886.87 9621.13
3. COST OF SALES, SERVICES AND EXPENSES J 434672.50 404280.24
4. PROFIT BEFORE INTEREST, DEPRECIATION AND
53802.76 37930.67
EXCEPTIONAL ITEMS
5. INTEREST K 984.40 1275.19
6. DEPRECIATION / AMORTISATION ON FIXED ASSETS 2140.96 2096.36
7. PROFIT BEFORE EXCEPTIONAL ITEMS 50677.40 34559.12
8. EXCEPTIONAL ITEMS L 2502.28 2613.12
9. PROFIT BEFORE TAXATION 53179.68 37172.24
10. PROVISION FOR TAXATION
- Provision for Current Tax 16401.67 11774.13
- Provision for Taxation of Earlier Years Written back (1629.34) (106.98)
- Provision for Deferred Tax 216.14 (319.07)
- Provision for Wealth Tax (Net of Excess Provision) 34.76 40.60
- Provision for Fringe Benefit Tax Nil 329.81
- MAT Credit Entitlement (299.85) Nil
14723.38 11718.49
11. PROFIT AFTER TAXATION 38456.30 25453.75
12. MINORITY INTEREST IN PROFIT (357.20) (288.95)
13. SHARE OF PROFIT / (LOSS) OF ASSOCIATE Nil (24.47)
14. PROFIT AFTER MINORITY INTEREST AND SHARE OF PROFIT OF ASSOCIATE 38099.10 25140.33
15. BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR 7170.66 7337.67
16. FOREIGN EXCHANGE TRANSLATION DIFFERENCE ON ABOVE (129.76) 300.43
17. AMOUNT TRANSFERRED FROM FOREIGN PROJECTS RESERVE 275.00 300.00
18. PROFIT AVAILABLE FOR APPROPRIATIONS 45415.00 33078.43
19. APPROPRIATIONS :
(a) GENERAL RESERVE 25178.06 19699.46
(b) LEGAL RESERVE 6.23 Nil
(c) SPECIAL RESERVE 17.37 14.41
(d) PROPOSED DIVIDEND 6617.69 5294.16
(e) TAX ON DIVIDEND 1099.12 899.74
32918.47 25907.77
20. BALANCE CARRIED FORWARD 12496.53 7170.66
Basic and diluted earnings per share of Re. 1 each (including
Exceptional items) (in Rs.) (See Note 11, Schedule 'M') 11.51 7.60

(For notes forming part of the Accounts see Schedule ’M’. For and on behalf of the Board
The Schedules referred to above form an integral part of the Accounts)
Chairman Ishaat Hussain
Managing Director Sanjay Johri
Directors Nasser Munjee
In terms of our report attached. N. J. Jhaveri
Ravi Kant
For Deloitte Haskins & Sells N. D. Khurody
Chartered Accountants N. N. Tata
J. S. Bilimoria
S. N. Menon
Nani Javeri
Executive Vice President (Finance) M. M. Miyajiwala
Nalin M. Shah General Manager - Taxation
Partner & Company Secretary V. P. Malhotra
Hyderabad, 28th May, 2010 Mumbai, 28th May, 2010
79
VOLTAS
Annual Report 2009-2010

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010

2008-09
Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs
A. CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before Taxation 53179.68 37172.24
Add - Adjustments for :
Depreciation / Amortisation 2140.96 2096.36
Provision for doubtful debt and advances (2276.83) 1831.76
Unrealised exchange (gain) / loss (257.33) 109.67
Exchange difference on translation of foreign currency
cash and cash equivalents 54.56 (74.16)
Provision for Contingencies (1016.53) 232.94
Provision for Diminution in value of Investments Nil 140.43
(Profit) on Sale/Retirement of Fixed Assets (Net) (2530.71) (2446.92)
(Profit) on Sale of Non Trade Current Investments (Net) (18.25) (700.52)
Interest Paid 984.40 1275.19
Interest Received (1090.15) (1343.28)
Income from Investments (976.83) (1188.62)
Impairment of Fixed Assets 227.11 469.12
Impairment of Goodwill on Consolidation 910.00 Nil
Provision for Employee Benefits 152.68 1145.03
(Profit) on Sale of Chemicals Trading Business Nil (873.22)
Provision for Trade Guarantee 751.20 770.52
(2945.72) 1444.30
Operating Profit before Working Capital changes 50233.96 38616.54

Less - Adjustments for:

(Increase)/Decrease in Inventories (2470.22) (46182.33)
(Increase)/Decrease in Trade and Other Receivables (4110.83) (31015.02)
(Increase)/Decrease in Loans and Advances 2634.55 (5778.23)
(Decrease)/Increase in Advances from Customers 5785.37 18134.47
(Decrease)/Increase in Trade Payables (4422.48) 45301.94
Exhange Fluctiation on Consolidation (894.29) 1226.35
(3477.90) (18312.82)
Cash generated from operations 46756.06 20303.72
Less: Taxes paid 16106.52 10475.31
NET CASH FROM OPERATING ACTIVITIES 30649.54 9828.41

80
 CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010 (contd.)

2008-09
Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (3169.73) (4390.25)
Sale of Fixed Assets 3501.18 724.24
Surrender of Tenancy Rights 64.54 2042.25
Purchase of Investments (16637.92) (90823.84)
Increase in Share Application Money Nil 223.83
Sale of Investments 8886.51 101583.73
Interest Received 1090.15 1346.98
Income from Investments 976.83 1188.62
Acquisition of Subsidiaries (net of cash acquired) Nil (5357.26)
Investment in Subsidiaries (2355.67) Nil
Advances to Subsidiary Companies Nil (48.08)

NET CASH FROM / (USED IN) INVESTING ACTIVITIES (7644.11) 6490.22

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Share Capital (Calls in Arrears) 0.03 0.39
Securities Premium (Calls in Arrears) 0.11 1.98
Increase/(Decrease) in other Borrowings (13292.80) 7294.38
Repayment of Long Term Borrowings (1334.00) (1520.50)
Interest Paid (987.23) (1284.40)
Increase/(Decrease) in unpaid Deposits (2.07) (2.11)
Dividend paid including dividend tax (6149.48) (5195.20)

NET CASH FROM / (USED IN) FINANCING ACTIVITIES (21765.44) (705.46)

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 1239.99 15613.17

CASH AND CASH EQUIVALENTS AS AT 1-4-2009 (See Schedule ‘G’ ) 45705.42 30018.09
EXCHANGE DIFFERENCE ON TRANSLATION OF FOREIGN
CURRENCY CASH AND CASH EQUIVALENTS (54.56) 74.16
CASH AND CASH EQUIVALENTS AS AT 31-3-2010 (See Schedule ‘G’) 46890.85 45705.42

For and on behalf of the Board

Chairman Ishaat Hussain
Managing Director Sanjay Johri
Directors Nasser Munjee
In terms of our report attached. N. J. Jhaveri
Ravi Kant
For Deloitte Haskins & Sells N. D. Khurody
Chartered Accountants N. N. Tata
J. S. Bilimoria
S. N. Menon
Nani Javeri
Executive Vice President (Finance) M. M. Miyajiwala
Nalin M. Shah General Manager - Taxation
Partner & Company Secretary V. P. Malhotra
Hyderabad, 28th May, 2010 Mumbai, 28th May, 2010

81
VOLTAS
Annual Report 2009-2010

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2010

SCHEDULE ‘A’ : SHARE CAPITAL As at

31-3-2009
Rupees Rupees
in Lakhs in Lakhs
1. AUTHORISED
60,00,00,000 Equity Shares of Re. 1 each 6000.00 6000.00
40,00,000 Redeemable Preference Shares of Rs.100 each 4000.00 4000.00
TOTAL 10000.00 10000.00
2. ISSUED, SUBSCRIBED AND CALLED-UP
33,08,84,740 Equity Shares of Re.1 each 3308.85 3308.85
Less: Calls in Arrears 1.48 1.51
TOTAL 3307.37 3307.34

Rupees in lakhs
SCHEDULE ‘B’ : RESERVES AND SURPLUS As at As at
31-3-2009 Acquired 31-3-2010
Opening Balance during the year Additions Deductions Closing Balance
1. SECURITIES PREMIUM 626.60 — 0.11 — 626.71
(624.62) (—) (1.98) (—) (626.60)
2. CAPITAL RESERVE 155.52 — — — 155.52
(155.52) (—) (—) (—) (155.52)
3. CAPITAL REDEMPTION RESERVE 125.70 — — — 125.70
(125.70) (—) (—) (—) (125.70)
4. CAPITAL RESERVE ON CONSOLIDATION 1839.48 — 0.68 — 1840.16
(872.47) (970.82) (—) (3.81) (1839.48)
5. GENERAL RESERVE * 63901.72 — 25178.06 116.04 88963.74
(44019.59) (—) (19882.13) (—) (63901.72)
6. STAFF WELFARE RESERVE 1.00 — — — 1.00
(1.00) (—) (—) (—) (1.00)
7. FOREIGN PROJECTS RESERVE 275.00 — — 275.00 —
(575.00) (—) (—) (300.00) (275.00)
8. FOREIGN EXCHANGE TRANSLATION RESERVE 1003.87 — (564.85) — 439.02
(193.66) (—) (810.21) (—) (1003.87)
9. SPECIAL RESERVE 465.89 — 17.37 — 483.26
(451.48) (—) (14.41) (—) (465.89)
10. LEGAL RESERVE (See Note 3, Schedule 'M')** 102.18 — 6.23 30.56 77.85
(58.66) (—) (43.52) (—) (102.18)
11. SURPLUS IN PROFIT AND LOSS ACCOUNT 7170.66 — 38244.34 32918.47 12496.53
(7337.67) (—) (19546.86) (19713.87) (7170.66)
TOTAL 75667.62 — 62881.94 33340.07 105209.49
(54415.37) (970.82) ( 40299.11) (20017.68) (75667.62)

* Deductions during the year are due to revaluation of opening balance (31-03-2009: Rs. 182.67 lakhs was included as Additions).
** Deductions during the year are due to revaluation of opening balance (31-03-2009: Rs. 43.52 lakhs was included as Additions).
Note : Figures in bracket are of previous year
SCHEDULE ‘C’ : SECURED LOANS As at
31-3-2009
Rupees Rupees
in Lakhs in Lakhs
LOANS FROM BANKS 3062.65 16876.05
TOTAL 3062.65 16876.05
SCHEDULE ‘D’ : UNSECURED LOANS As at
31-3-2009
Rupees Rupees
in Lakhs in Lakhs
1. SHORT TERM LOANS AND ADVANCES
From Other than Banks 454.39 756.28
2. OTHER LOANS AND ADVANCES
From Banks Nil 511.51
TOTAL 454.39 1267.79

82
 SCHEDULE ‘E’ : FIXED ASSETS (At Cost Less Depreciation)

GROSS BLOCK AT COST DEPRECIATION / AMORTISATION NET BLOCK

Particulars As at Adjust- Additions Deduc- Exchange As at Up to Adjust- For the On Impair- Exchange Up to As at As at
March 31, ments tions Difference March 31, March 31, ments Year Deduc- ment Difference March 31, March 31, March 31,
2009 (See Note (See Note 2010 2009 (See Note tions (See (See Note 2010 2010 2009
‘a’ below) ‘b’ below) ‘a’ below) Note ‘b’ below)
‘d’ below)
(1+2+3- (7+8+9- (6-13) (1-7)
4+5) 10+11+12)
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15)
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs
1. Freehold Land 803.64 Nil Nil 10.10 Nil 793.54 Nil Nil Nil Nil Nil Nil Nil 793.54 803.64

2. Leasehold Land 568.98 Nil Nil Nil Nil 568.98 14.61 Nil 6.23 Nil Nil Nil 20.84 548.14 554.37

3. Buildings 11267.17 Nil 461.20 212.34 (60.74) 11455.29 2765.18 Nil 352.31 120.49 4.35 (22.39) 2978.96 8476.33 8501.99
(See Notes c & d below)
4. Plant & Machinery 20771.14 Nil 1385.01 2709.55 (194.54) 19252.06 11207.76 Nil 1155.27 1817.05 222.76 (215.61) 10553.13 8698.93 9563.38
(See Note d below)
5. Furniture & Fittings 2172.10 Nil 144.38 50.79 (18.14) 2247.55 1419.83 Nil 169.91 43.53 Nil (38.28) 1507.93 739.62 752.27

6. Vehicles 1482.87 Nil 185.56 193.06 (72.98) 1402.39 906.54 Nil 138.21 159.76 Nil (123.17) 761.82 640.57 576.33

83
7. Intangible Assets: 1004.32 Nil Nil Nil Nil 1004.32 1004.32 Nil Nil Nil Nil Nil 1004.32 Nil Nil
Manufacturing Rights &
Technical Know-how
8. Software 1791.89 Nil 383.14 Nil (1.61) 2173.42 1067.05 Nil 319.03 Nil Nil (1.62) 1384.46 788.96 724.84
39862.11 Nil 2559.29 3175.84 (348.01) 38897.55 18385.29 Nil 2140.96 2140.83 227.11 (401.07) 18211.46 20686.09 21476.82
Previous Year (31632.90) (4014.16) (5040.93) (1328.97) (503.09) (39862.11) (14620.39) (1816.23) (2096.36) (1009.40) (469.12) (392.59) (18385.29) (21476.82)

Capital Work-in-Progress [Including advances against Capital

9. Expenditure Rs. 649.35 Lakhs (31-3-2009: Rs 706.25 Lakhs)] (See Note ‘e’ below) 1934.31 1323.87
22620.40 22800.69

Notes :
(a) Previous year’s figures include assets and depreciation of Rohini Industrial Electrical Limited, Universal Comfort Products Limited, and Saudi Ensas Company for
Engineering Services W.L.L. which became subsidiaries during the previous year.
(b) Exchange Differences in columns (5) and (12) above relate to the opening balances.
(c) Includes factory building of Rs. 110.74 Lakhs (31-3-2009 : Rs. 125.16 Lakhs) (original cost) and Rs. 5.47 Lakhs (31-3-2009 : Rs. 9.28 Lakhs) (net book value) constructed on
leasehold land, the lease period being fifteen years with a renewal option.
(d) Fixed Assets include assets held for sale aggregating Rs. 1615.82 Lakhs (31-3-2009 : Rs. 964.40 Lakhs), valued at the lower of the estimated net realisable value and net
book value.
(e) Capital Work-in-Progress is net of Government Subsidy received.
VOLTAS
Annual Report 2009-2010

SCHEDULE ‘F’ : INVESTMENTS (at Cost) As at

31-3-2009
Rupees Rupees
in Lakhs in Lakhs
LONG TERM INVESTMENTS
1. TRADE INVESTMENTS (See Note 4, Schedule ‘M’ )
Subsidiary Companies (See Note 2(c), Schedule ‘M’) 119.63 119.63
Equity Shares (Quoted) 1428.38 1519.28
Equity Shares (Unquoted) (See Note 2(d) and 4(c), Schedule ‘M’) 1370.32 1370.32
Preference Shares (Unquoted) Nil 500.00
2. OTHER INVESTMENTS
Equity Shares (Quoted) 0.04 0.04
Equity Shares (Unquoted) 0.48 0.48
Units of Mutual Fund (Unquoted) 175.00 275.00
TOTAL LONG TERM INVESTMENTS 3093.85 3784.75

CURRENT INVESTMENTS
Units of Mutual Fund (Unquoted) 20808.01 12346.69
Government Securities (Unquoted) 0.05 0.55
Equity Shares (Quoted) 93.65 93.89
TOTAL CURRENT INVESTMENTS 20901.71 12441.13
TOTAL INVESTMENTS 23995.56 16225.88
LESS: PROVISION FOR DIMINUTION IN VALUE 601.19 601.19
TOTAL 23394.37 15624.69
Quoted : Cost 1522.07 1613.21
: Market Value 13970.60 4408.66
Unquoted : Cost 22473.49 14612.67
SCHEDULE ‘G’ : CURRENT ASSETS, LOANS & ADVANCES As at
31-3-2009
Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs

1. INVENTORIES
STORES 22.12 18.41
STOCK-IN-TRADE :
(a) Raw Materials and Components 11252.86 12233.44
(b) Work-in-Progress 637105.25 508006.50
Less: Amounts Invoiced 567816.76 437856.59
69288.49 70149.91
(c) Finished Goods 33845.53 29537.02
114386.88 111920.37
114409.00 111938.78
2. SUNDRY DEBTORS
(a) Fully secured, considered good 621.27 837.16
(b) Unsecured, considered good 99976.06 94371.53
(c) Considered doubtful 4601.37 5971.96
105198.70 101180.65
Less: Provision for doubtful debts 4601.37 5971.96
100597.33 95208.69
3. CASH AND BANK BALANCES
(a) Cash in hand and Cheques on Hand 4358.83 2826.14
(b) Bank balances in Current Accounts 14566.37 11249.78
(c) Bank balances in Fixed Deposit Accounts 27965.65 31629.50
46890.85 45705.42
4. LOANS AND ADVANCES
- Deposits with public bodies, others 2441.64 2682.39
- Other advances 17979.94 20373.74
- Advance payment of taxes (Net) 692.56 221.14
21114.14 23277.27
Less: Provision for doubtful advances 337.31 1243.55
20776.83 22033.72
TOTAL 282674.01 274886.61

84
SCHEDULE ‘H’ : CURRENT LIABILITIES AND PROVISIONS As at
31-3-2009
Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs
(A) CURRENT LIABILITIES
1. ACCEPTANCES 7657.64 7452.64
2. SUNDRY CREDITORS 111415.58 117822.16
3. ADVANCE PAYMENTS AND DEPOSITS RECEIVED :
(a) From Customers / Others 70902.33 65672.48
(b) Against Unexpired Service Contracts 2252.40 1696.88
73154.73 67369.36
4. OTHER LIABILITIES 6251.95 4781.48
5. INTEREST ACCRUED BUT NOT DUE ON LOANS Nil 1.96
TOTAL (A) 198479.90 197427.60
(B) PROVISIONS
6. PROVISION FOR TAXATION (NET) 4296.20 5424.06
7. PROPOSED DIVIDEND 6617.69 5294.16
8. PROVISION FOR DIVIDEND TAX 1099.12 899.74
9. PROVISION FOR TRADE GUARANTEES (See Note 6, Schedule 'M') 5596.45 4845.25
10. PROVISION FOR EMPLOYEE BENEFITS 7716.54 7563.86
11. PROVISION FOR CONTINGENCIES (See Note 6, Schedule 'M') 1125.00 2141.53
TOTAL (B) 26451.00 26168.60
TOTAL (A) + (B) 224930.90 223596.20

SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS

ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010
SCHEDULE ‘I’ : OTHER INCOME Year ended
31st March,
2009
Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs
1. Income from Investments
(a) Trade Investments (Long Term) 280.03 278.19
(b) Other Investments (Long Term) 0.41 23.65
(c) Other Investments (Current) 696.39 886.78
976.83 1188.62
2. Miscellaneous Income 2284.70 1808.57
3. Provision for Contingencies written back 232.94 Nil
4. Profit on Redemption of Mutual Funds / Sale of Non-Trade Current Investments (Net) 18.25 700.52
5. Rent Received 3284.00 2553.29
6. Foreign Exchange Gain (Net) Nil 2026.85
7. Interest Received
(a) In respect of sales on deferred payment terms and other accounts 141.83 257.63
(b) On fixed deposits with Banks 828.62 862.10
(c) On Income tax refunds 119.70 223.55
1090.15 1343.28
TOTAL 7886.87 9621.13
85
VOLTAS
Annual Report 2009-2010

SCHEDULE ‘J’ : COST OF SALES, SERVICES AND EXPENSES Year ended

31st March,
2009
Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs
1. Stock-in-Trade per 1-4-2009 (See Note 8, Schedule 'M') 59815.03 42430.77
2. Stock-in-Trade taken over on acquisition of Subsidiaries Nil 1748.22
3. Purchases and cost of jobs, manufacture and services 335876.56 332489.08
4. Stock-in-Trade per 31-3-2010 (See Note 8, Schedule 'M') 65770.30 59815.03
5. Cost of Sales and Services (1 + 2 + 3 - 4 ) 329921.29 316853.04
6. Staff Expenses
(a) Salaries, Wages and Bonus 49067.49 42243.93
(b) Company's contribution to Provident Funds and other Funds 1664.71 1874.41
(c) Provision for Retirement benefits 1760.53 1202.76
(d) Welfare Expenses 1076.38 1235.58
53569.11 46556.68
7. Forwarding Charges (Net) 2232.25 2196.90
8. Commission other than to Sole Selling Agents under Section
294 of the Companies Act, 1956 10586.77 4974.47
9. Advertising (Net) 2819.95 1136.11
10. Rent paid 5002.20 3533.73
Less: Rent recovered Nil 4.03
5002.20 3529.70
11. Rates and Taxes 172.75 145.82
12. Insurance 1224.63 895.12
13. Stores Consumed 524.59 546.89
14. Power 357.69 379.31
15. Repairs to Buildings 182.17 366.21
16. Repairs to Plant and Machinery 527.96 601.95
17. Travelling and Conveyance 6439.12 5701.41
18. Stationery, Postage, Fax and Telephone 1967.37 2055.68
19. Auditors' Remuneration (See Note 15, Schedule 'M') 210.23 176.98
20. Audit fees payable to Branch Auditors 35.92 31.63
21. Audit fees payable to Cost Auditors 1.63 1.05
22. Legal and Professional charges 2074.74 1124.00
23. Other expenses 15437.53 16188.14
24. Bad and Doubtful Debts / Advances 852.38 639.26
25. Donations 33.98 40.59
26. Loss on Sale of Fixed Assets (Net) 350.01 139.30
27. Loss on Foreign Exchange (Net) 148.23 Nil
TOTAL 434672.50 404280.24

86
SCHEDULE ‘K’ : INTEREST Year ended
31st March,
2009
Rupees Rupees
in Lakhs in Lakhs

Interest Paid
(a) On fixed loans 86.01 184.56
(b) On other accounts 898.39 1090.63

TOTAL 984.40 1275.19

SCHEDULE ‘L’ : EXCEPTIONAL ITEMS Year ended

31st March,
2009
Rupees Rupees
in Lakhs in Lakhs
1. Profit on Sale of Property / Assignment of Balance Leasehold
Rights/Transfer of Development Rights/ Surrender of Tenancy
Rights (Net) 2880.72 2586.22

2. Profit on Sale of Chemicals Trading Business Nil 873.22

3. Reversal of Provision for Contingencies 783.59 Nil

3664.31 3459.44

Less :

4. Provision for Diminution in value of Investments Nil 140.43

5. Cost of Voluntary Retirement Scheme 24.92 48.51

6. Impairment of Fixed Assets 227.11 469.12

7. Impairment of Goodwill on Consolidation 910.00 Nil

8. Workmen Compensation Cost Nil 188.26

1162.03 846.32

TOTAL 2502.28 2613.12

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VOLTAS
Annual Report 2009-2010

SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR

ENDED 31ST MARCH, 2010
1. PRINCIPLES OF CONSOLIDATION :
The Consolidated Financial Statements relate to Voltas Limited (“the Company”), its subsidiary companies and joint ventures.
The Company and its Subsidiaries constitute the “Group”. The Consolidated Financial Statements have been prepared on the
following basis:

(i) The Financial Statements of the Company and its subsidiaries have been combined on a line-by-line basis by adding
together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group
balances, intra-group transactions and unrealised profits or losses as per Accounting Standard 21 - Consolidated
Financial Statements notified under the Companies (Accounting Standards) Rules, 2006.
(ii) Foreign subsidiaries and joint ventures of the Company have been classified as “Non Integral Foreign Operations”.
Revenue items of such entities are converted at the average rate prevailing during the year and Assets and Liabilities are
converted at the rates prevailing at the end of the year. All resulting exchange differences have been accumulated in a
Foreign Exchange Translation Reserve.
(iii) Interests in joint ventures have been accounted by using the proportionate consolidation method as per Accounting
Standard 27 - Financial Reporting of Interests in Joint Ventures notified under the Companies (Accounting Standards)
Rules, 2006.
(iv) The Financial Statements of the subsidiaries and joint ventures consolidated are drawn upto the same reporting date of
the Company i.e. 31st March, 2010 except Saudi Ensas Company for Engineering Services W.L.L, Weathermaker Limited,
Universal Voltas L.L.C. and Universal Weathermaker Factory L.L.C. where the accounts are drawn upto 31st December, 2009.
(v) The excess of the Company’s portion of equity of the subsidiaries and joint ventures as at the date of its investment
over the cost of its investment is treated as Capital Reserve on Consolidation. The excess of cost to the Company of
its investment in subsidiaries and joint ventures over the Company’s portion of equity as at the date of investment is
treated as Goodwill on Consolidation.
(vi) Minority interest in the net assets of consolidated subsidiaries consists of :
(a) The amount of equity attributable to the minorities at the date on which investment in a subsidiary is made; and
(b) The minorities’ share of movements in equity since the date the parent-subsidiary relationship came into
existence.
(vii) Minority interests share of net profit for the year of consolidated subsidiaries is identified and adjusted against the profit
after tax of the group.

2. The list of subsidiary companies, joint ventures and associates and the Company’s holdings therein are as under :

Name of the Company Country of Ownership in % either

Incorporation directly or through Subsidiaries

2009-10 2008-09

Indian Subsidiaries :

– Simto Investment Company Ltd. 95.57 95.51

– Auto Aircon (India) Ltd. 100.00 100.00

– Agro Foods Punjab Ltd. (under liquidation) 100.00 100.00

– Westerwork Engineers Ltd. (under liquidation) 51.00 51.00

– Universal Comfort Products Ltd. (w. e. f. 17-6-2008) 100.00 100.00

– Rohini Industrial Electricals Ltd. (w. e. f. 4-9-2008) 67.33 51.00

88
SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31ST MARCH, 2010 (contd.)
Name of the Company Country of Ownership in % either
Incorporation directly or through Subsidiaries
Foreign Subsidiaries : 2009-10 2008-09
– Metrovol FZE United Arab Emirates 100.00 100.00
– VIL Overseas Enterprises B.V. The Netherlands 100.00 100.00
– Voice Antilles N.V. Netherlands Antilles 100.00 100.00
– Weathermaker Ltd. Isle of Man 100.00 100.00
– Saudi Ensas Company for Engineering Services W.L.L. Saudi Arabia 100.00 100.00
(w.e.f. 28-1-2009)
Indian Joint Ventures :
– Universal Comfort Products Private Ltd. (upto 16-6-2008) — 50.00
– Naba Diganta Water Management Ltd. 26.00 26.00
Foreign Joint Ventures :
– Lalbuksh Voltas Engineering Services & Sultanate of Oman 49.00 49.00
Trading L.L.C., Muscat
– Saudi Ensas Company for Engineering Saudi Arabia — 49.00
Services W.L.L. (upto 27-1-2009)
– Agrotech Industries Ltd. (under closure) Isle of Man 49.00 49.00
– AVCO Marine S.a.S. (under liquidation) France 50.00 50.00
– Universal Voltas L.L.C. United Arab Emirates 49.00 49.00
– ETA – Voltas – Hitachi Plant United Arab Emirates 37.50 37.50
(Jointly Controlled Operations)
– NDIA Package 19 Project Qatar 77.08 77.08
(Jointly Controlled Operations)
– Sidra Medical & Research Centre Project Qatar 51.08 51.08
(Jointly Controlled Operations)
– Universal Weathermaker Factory L.L.C. United Arab Emirates 49.00 49.00
(w.e.f. 26-4-2008)
Associates :
– Terrot GmbH (upto 20-3-2009) Germany — 18.50
(Refer Note (d) below)
– Brihat Trading Pvt. Ltd. India 33.33 33.33
(Refer Note (a) below)

Notes:
(a) The accounts of Brihat Trading Private Limited, an associate company are not available for consolidation. The operations
of this company have no significant impact on the revenue, expenses, assets and liabilities of the consolidated accounts.
(b) The accounts of Agrotech Industries Limited and AVCO Marine S.a.S. joint ventures have not been consolidated as they
are under closure and liquidation, respectively and the investments in the books of the Company are fully provided.
(c) The accounts of Agro Foods Punjab Limited and Westerwork Engineers Limited, subsidiaries, have not been consolidated
as they are under liquidation and the investments in the books of the Company are fully provided.
(d) Terrot GmbH ceased to be an Associate Company with effect from 20-3-2009.

89
VOLTAS
Annual Report 2009-2010

SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR

ENDED 31ST MARCH, 2010 (contd.)
3. SIGNIFICANT ACCOUNTING POLICIES:
(i) The accounts are prepared on historical cost convention on accrual basis of accounting and comply with the Accounting
Standards as notified under the Companies (Accounting Standards) Rules, 2006 of the Companies Act, 1956.
The Financial Statements of certain foreign subsidiaries and joint ventures used for the purpose of the Consolidated
Financial Statments have been prepared in accordance with International Financial Reporting Standards (IFRS) and in
compliance with local laws as applicable. However there are no material differences.
The preparation of the accounts requires the Management to make estimates and assumptions considered in the
reported amounts of assets and liabilities (including the contingent liabilities) and the reported income and expenses
during the period. The Management believes that the estimates used in preparation of the accounts are prudent and
reasonable. Future results could differ due to these estimates and the differences between the actual results and the
estimates are recognised in the periods in which the results are known / materialise.

(ii) SALES & SERVICES

(a) Sales exclude sales tax, value added tax and works contract tax but include excise duty. Commission earned on
consignment sales is accounted for as part of sales and services.
(b) Sales and services are accounted on accrual basis when the sale of goods or services is completed.
(c) Revenue from long-term contracts, where the outcome can be estimated reliably, is recognised under the
percentage of completion method by reference to the stage of completion of the contract activity. The stage of
completion is measured by calculating the proportion that costs incurred to date bear to the estimated total
costs of a contract. Where the outcome of construction contract cannot be estimated reliably, contract revenue is
recognised to the extent of contract costs incurred that probably will be recoverable. Contract costs are recognised
as expenses in the period in which they are incurred. When the current estimate of total contract costs and revenue
is a loss, provision is made for the entire loss on the contract irrespective of the amount of work done.
Variation in contract work, claims and incentives payment are included in revenue to the extent that they have
been agreed with the client and can be reliably measured.
(d) Long-Term Annual Maintenance Contracts :
The revenue from maintenance contracts is recognised on accrual basis and advance received in respect of future
period is accounted for as Unexpired Service Contracts.
In case of Mining Equipment, the revenue from such contracts is recognised in proportion to the cost actually
incurred during the year in terms of the total cost after completion of such contracts, as repairs and maintenance
of such machineries depends on its utilisation and wear and tear which varies from year to year. The excess of
billings over cost is deferred and accounted for as “Unexpired Service Revenue”. In case the actual cost incurred is
higher than the billings, such cost is accounted for immediately.
(iii) DEPRECIATION / AMORTISATION
(a) Depreciation on all assets of the Parent Company has been provided on the Straight Line Basis at the rates
prescribed in Schedule XIV to the Companies Act, 1956, except as under :
(i) Depreciation on furniture and fittings has been provided on the Written Down Value Basis at the rates
prescribed in Schedule XIV to the Companies Act, 1956.
(ii) Intangible assets are amortised on the Straight Line Basis over their useful life. Manufacturing Rights and
Technical Know-how have been amortised over 72 months and Software is amortised over 60 months.
(iii) Premium paid on Leasehold Land is amortised over the period of the lease.
(b) In some subsidiaries, depreciation on tools, furniture, fixtures and office equipment is provided for over a period
of four years and for motor vehicles over a period of three years.
(c) In one of the subsidiaries, depreciation on all Fixed Assets has been provided for on Written Down Value Basis.
(d) In some of the foreign subsidiaries and foreign joint ventures, the cost of assets including intangible assets has
been depreciated using the Straight Line Basis over their estimated useful lives.
(e) In one of the subsidiaries, depreciation on Computers and Vehicles has been charged at 20% and furniture on the
Straight Line Basis at the rate prescribed in Schedule XIV to the Companies Act, 1956.

90
SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31ST MARCH, 2010 (contd.)
(iv) PROVISION FOR TRADE GUARANTEES
Provision for estimated costs to be incurred in providing warranty services is made in the accounts in the year in which
goods are sold or a long term contract is completed.
(v) LEGAL RESERVE
In case of some foreign joint ventures, an amount equal to 10% of the annual net profit is transferred to Legal Reserve in
compliance with requirements of local laws. This reserve is not available for distribution.
(vi) FIXED ASSETS
Fixed assets are stated at cost less accumulated depreciation / impairment.
Own manufactured goods are capitalised at cost excluding interest but including excise duty net of CENVAT, octroi duty
and receiving/installation charges.
Interest on borrowed money allocated to and utilised for qualifying fixed assets, pertaining to the period upto the date
of capitalisation is added to the cost of the assets.
Assets acquired under finance leases are recognised at the lower of the fair value of the leased assets at inception and
the present value of minimum lease payments. Lease payments are apportioned between the finance charge and the
outstanding liability. The finance charge is allocated to periods during the leased term at a constant periodic rate of
interest on the remaining balance of the liability.
(vii) INTANGIBLE ASSETS
Intangible assets are stated at cost less accumulated amortisation.
(viii) IMPAIRMENT OF ASSETS
The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any
indication of such impairment exists, the recoverable amount of such assets is estimated and impairment is recognised,
if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the
net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present
value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset
in prior accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in
the Profit and Loss Account.
(ix) PROVISIONS AND CONTINGENCIES
A provision is recognised when the Group has a present legal or constructive obligation as a result of past events and it is
probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can
be made. Provisions (excluding retirement benefits) are not discounted to their present values and are determined based
on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet
date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in Notes to Accounts.
(x) FINANCE LEASE
Fixed assets acquired under finance leases are recognised at the lower of the fair value of the leased assets at inception
and the present value of minimum lease payments. Lease payments are apportioned between the finance charge and
the reduction of the outstanding liability. The finance charge is allocated to periods during the leased term at a constant
periodic rate of interest on the remaining balance of the liability.
Rents payable under operating leases are charged to income on the Straight Line Basis over the terms of the operating lease.
(xi) INVESTMENTS
Long-term investments are carried at cost less provision for any diminution other than temporary, in the value of such
investments.
Current investments are carried at the lower of cost and fair value.

91
VOLTAS
Annual Report 2009-2010

SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR

ENDED 31ST MARCH, 2010 (contd.)
(xii) INVENTORIES
Inventories including Work-in-Progress (other than Construction Contracts) are valued at cost or net realisable value
whichever is lower, cost being worked out on weighted average basis (except in the case of a foreign subsidiary, where
cost is determined on FIFO basis). Cost includes all charges incurred for bringing the goods to the point of sale, including
octroi and other levies, transit insurance and receiving charges. With regard to construction contracts, work-in-progress
includes profits/losses to the extent recognised.
(xiii) TAXES ON INCOME
Current Tax is the amount of the tax payable on the taxable income for the year as determined in accordance with the
provisions of the applicable tax laws.
Deferred Tax is recognised on timing differences, being the differences between the taxable income and the accounting
income that originate in one period and are capable of reversal in one or more subsequent periods.
Deferred Tax Assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual
certainty that there will be sufficient future taxable income available to realise such losses. Other Deferred Tax Assets are
recognised if there is reasonable certainty that there will be sufficient future taxable income to realise such assets.
(xiv) FOREIGN EXCHANGE TRANSACTIONS / TRANSLATIONS
(a) The foreign branches of the Group have been classified as “Integral Foreign Operations”. Monetary items
outstanding at the Balance Sheet date are translated at the exchange rate prevailing at the Balance Sheet date
and the resultant difference is recognised as income or expense. Non-monetary items outstanding at the Balance
Sheet date are reported using the exchange rate at the date of the transactions.
(b) Monetary assets and liabilities relating to foreign currency transactions remaining unsettled at the end of the
year are translated at the year-end rate and the difference in translation and realised gains and losses on foreign
exchange transactions are recognised in the Profit and Loss Account. In respect of transactions covered by foreign
exchange contracts, the difference between the contract rate and the spot rate on the date of the transaction is
charged to the Profit and Loss Account over the period of the contract.
(xv) ACCOUNTING FOR VOLUNTARY RETIREMENT SCHEME
(a) The cost of Voluntary Retirement Schemes / Retrenchment Compensation including ex-gratia and additional
gratuity liability arising therefrom is charged to the Profit and Loss Account in the month of separation of
employees.
(b) The Present Value of future payments to employees opting for Early Separation Scheme (ESS) and the additional
gratuity liability arising therefrom are charged to the Profit and Loss Account in the month of separation of employees.

(xvi) EMPLOYEE BENEFITS

(a) Defined Contribution Plan
Contribution to Superannuation Fund, a defined contribution scheme, is made at pre-determined rates to the
Superannuation Fund Trust and is charged to the Profit and Loss Account. There are no other obligations other
than the contribution payable to the Superannuation Fund Trust.
(b) Defined Benefit Plans
(i) The Group’s liabilities towards gratuity and post retirement medical benefit schemes are determined
using the projected unit credit method which considers each period of service as giving rise to an
additional unit of benefit entitlement and measures each unit separately to build up the final obligation.
Actuarial gains and losses based on actuarial valuation done by the independent actuary carried out
annually are recognised immediately in the Profit and Loss Account as income or expense. Obligation is
measured at the present value of estimated future cash flows using a discounted rate that is determined
by reference to market yields at the Balance Sheet date on Government bonds where the currency and
terms of the Government bonds are consistent with the currency and estimated terms of the defined
benefit obligation.

92
SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31ST MARCH, 2010 (contd.)
(ii) The Group’s Contribution to recognised Provident Fund paid / payable during the year is recognised in
the Profit and Loss Account. The shortfall, if any, between the return guaranteed by the statute and actual
earnings of the Fund is provided for by the Group and contributed to the Fund.
(c) Compensated Absences
Compensated absences which accrue to employees and which are expected to be availed in twelve months
immediately following the year end are reported as expenses during the year in which the employees perform
the services that the benefit covers and the liablities are reported at the undiscounted amount of the benefit and
where the availment or encashment is otherwise not expected to occur in the next twelve months, the liablity on
account of the benefit is actuarially determined using the projected unit credit method.
(xvii) SEGMENT REPORTING
The accounting policies used in the preparation of the financial statements of the Group are also applied for Segment
Reporting. Revenue and expenses have been identified to segments on the basis of their relationship to the operating
activities of the segment. Revenue and expenses, which relate to the Group as a whole and are not allocable to
segments on a reasonable basis, have been included under “Unallocated income / expenses”.

4. INVESTMENTS
(a) The Company has pursuant to a loan agreement given an undertaking to Punjab State Industrial Development
Corporation Ltd. that it will not dispose of its investments in one of the subsidiary company. The Company had in
1998-99 transferred its beneficial rights in the shares of that subsidiary.
(b) As the title of ownership of shares costing Rs.4.55 Lakhs is under dispute, pursuant to an injunction order passed by the
Court in Kanpur, the Company has not recognised dividend on this investment.
(c) Movement in Associate Investment - (Terrot GmbH)
(Refer Note 2(d) of schedule ‘M’)

2008-09
Rupees
in Lakhs
Opening Balance in Investment 168.71
Add : Post-acquisition profit for the year Nil
Less : Reversal of pre and post acquisition of profit on cessation of Equity Method 28.28
Less : Provision for diminution in value of Investment 140.43

Closing Balance in Investment Nil

The entity ceased to be an associate with effect from 20-03-2009.

5. INVENTORIES - WORK-IN-PROGRESS
In respect of Construction Contracts which are in progress as at the year end :

As at
31-3-2009
Rupees Rupees
in Lakhs in Lakhs
(a) Aggregate amount of costs incurred and net recognised profits (less recognised losses) 616433.33 489961.93
(b) Advances received for such contracts in progress 46761.76 49422.86
(c) The amount of retentions due for such contracts 21959.05 17608.71
(d) The gross amount due from customers for such contracts 48616.37 54689.98
(e) The gross amount due to customers for such contracts 19655.41 8823.21

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VOLTAS
Annual Report 2009-2010

SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR

ENDED 31ST MARCH, 2010 (contd.)
6. CURRENT LIABILITIES AND PROVISIONS
Provisions
Rupees
in Lakhs
Opening Additions Utilisation Reversal Closing
Balance Balance
Trade Guarantee 4845.25 5567.69 3303.24 1513.25 5596.45
(4074.73) (5716.15) (2470.43) (2475.20) (4845.25)

Contingency for tax matters 1357.94 Nil Nil 232.94 1125.00

(1125.00) (232.94) (Nil) (Nil) (1357.94)

Contingency for claims 783.59 Nil Nil 783.59 Nil

(783.59) (Nil) (Nil) (Nil) (783.59)
The provision for Trade Guarantee is expected to be utilised for warranty expenses / settlement of claims within a period of 1 to 5 years.
Note : Figures in brackets are for the previous year.

7. DEFERRED TAX ASSET / LIABILITY

(a) Major components of deferred tax assets (Net) :

As at 31-3-2009
Deferred Deferred Deferred Deferred
Tax Tax Tax Tax
Assets Liabilities Assets Liabilities
Rupees Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs in Lakhs
(i) Depreciation 18.43 2743.48 11.13 2697.00
(ii) Voluntary Retirement Scheme 35.00 — 328.00 —
(iii) Unpaid Statutory Liabilities 576.00 — 495.58 —
(iv) Provision for Doubtful Debts and Advances 1448.17 — 1338.00 —
(v) Provision for Contingencies 373.56 — 529.00 —
(vi) Provision for Employees Benefits 2272.63 — 2139.17 —
(vii) Others 58.64 — 96.00 —
Total 4782.43 2743.48 4936.88 2697.00
Net Timing Differences
Deferred Tax assets 2038.95 — 2239.88 —

(b) Major components of deferred tax liability (Net) :

As at 31-3-2009
Deferred Deferred Deferred Deferred
Tax Tax Tax Tax
Assets Liabilities Assets Liabilities
Rupees Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs in Lakhs
(i) Depreciation — 200.36 — 354.00
(ii) Unabsorbed Depreciation 165.82 — 354.00 —
(iii) Provision for Employees Benefits 5.07 — — —
(iv) Others 14.26 — — —
Total 185.15 200.36 354.00 354.00

Net Timing Differences

Deferred Tax (liability) (15.21) — — —
The deferred tax assets have been recognised on unabsorbed depreciation to the extent of virtual certainty on account
of deferred tax liability on depreciation timing difference.

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SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31ST MARCH, 2010 (contd.)
8. COST OF SALES, SERVICES AND EXPENSES :

(i) Opening and Closing Stock-In-Trade excludes WIP for Long Term Contracts Rs.489961.93 Lakhs (1-4-2008 : Rs.270768.45 Lakhs)
and Rs. 616433.33 Lakhs (31-3-2009 : Rs. 489961.93 Lakhs), respectively.

(ii) (a) The Group makes contribution towards provident funds, a defined benefit retirement plan and towards
superannuation fund, a defined contribution retirement plan for qualifying employees. These funds are
administered by the trustees appointed by the Company. Under the schemes, the Company is required to
contribute a specified percentage of salary to the retirement benefit schemes to fund the benefit.

(b) The Company makes annual contribution to Gratuity Funds, which are funded defined benefit plans for qualifying
employees. The scheme provides for lumpsum payment to vested employees at retirement, death while in
employment or on termination of employment as per the Company’s Gratuity Scheme. Vesting occurs upon
completion of 5 years of service.

The Company is also providing post retirement medical benefits to qualifying employees.

The most recent actuarial valuations of plan assets and the present values of the defined benefit obligations were
carried out as at 31st March, 2010. The present value of the defined benefit obligation and the related current service
cost and past service cost, are measured using the Projected Unit Credit Method.

The following tables set out the funded status and amounts recognised in the Company’s financial statements
as at 31st March, 2010 for the Defined Benefit Plans other than Provident Fund. According to the Management, in
consultation with the actuary, actuarial valuation cannot be applied to reliably measure provident fund liabilities in the
absence of guidance from the Actuarial Society of India.

Defined Benefit Plans - As per Actuarial Valuation as on 31st March, 2010 :

Gratuity Gratuity Post Pension

Unfunded Funded Employment Plan
Medical
Benefits
Rupees Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs in Lakhs
I. Expense recognised in the Profit and Loss
Account for the year ended 31st March, 2010

1. Current Service Cost 623.72 320.91 24.93 —

329.94 234.36 27.14 —
2. Interest Cost 71.78 283.48 44.03 47.58
38.66 270.84 36.51 44.19
3. Expected return on plan assets — (254.88) — —
— (147.92) — —
4. Cost of plan amendment — 48.16 159.59 —
— — — —
5. Actuarial (Gains)/Losses (75.27) 197.02 (19.79) 165.81
384.45 514.11 84.02 75.72
6. Difference in Exchange 7.45 — — —
— — — —
7. Total expense 627.68 594.69 208.76 213.39
753.05 871.39 147.67 119.91

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SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR

ENDED 31ST MARCH, 2010 (contd.)
Gratuity Gratuity Post Pension
Unfunded Funded Employment Plan
Medical
Benefits
Rupees Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs in Lakhs
II. Net Liability recognised in the
Balance Sheet as at 31st March, 2010

1. Present value of Defined Benefit

Obligation 1989.25 4558.84 791.63 813.69

1892.96 4045.72 629.01 679.67

2. Fair value of plan assets as at 31st March, 2010 — 4069.15 — —

— 3645.93 — —

3. Net liability as at 31st March, 2010 1989.25 489.69 791.63 813.69

1892.96 399.79 629.01 679.67

III. Change in Obligation during the year ended

31st March, 2010

1. Present value of Defined Benefit

Obligation at the beginning of the year 1892.96 4045.72 629.01 679.67

864.92 3386.01 521.62 631.30

2. Current Service Cost 623.72 320.91 24.93 —

329.94 234.36 27.14 —

3. Interest Cost 71.78 283.48 44.03 47.58

38.66 270.84 36.51 44.19

4. Actuarial (Gains)/Losses (75.27) 271.24 (19.79) 165.81

384.45 571.07 84.02 75.72

5. Cost of Amendment — 48.16 159.59 —

— — — —

6. Benefits Payments (290.59) (410.67) (46.14) (79.37)

(211.89) (416.56) (40.28) (71.54)

7. Difference in exchange (233.35) — — —

136.50 — — —

8. Present value of Defined Benefit

Obligation at the end of the year 1989.25 4558.84 791.63 813.69

1892.96 4045.72 629.01 679.67

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SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31ST MARCH, 2010(contd.)
Gratuity Gratuity Post Pension
Unfunded Funded Employment Plan
Medical
Benefits
Rupees Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs in Lakhs
IV. Change in Assets during the year ended
31st March, 2010
1. Plan assets at the beginning of the year — 3645.93 — —
— 1848.98 — —
2. Expected return on plan assets — 254.88 — —
— 147.92 — —
3. Contributions by employers 290.59 504.79 46.14 79.37
211.89 2008.63 40.28 71.54
4. Actual benefits paid (290.59) (410.67) (46.14) (79.37)
138.49 (416.56) (40.28) (71.54)
5. Actuarial Gains/(Losses) — 74.22 — —
— 56.96 — —
6. Plan assets at the end of the year — 4069.15 — —
— 3645.93 — —
7. Actual return on plan assets (2+5) — 329.10 — —
— 204.88 — —

V. Amount Recognised in the Balance Sheet

1. Opening Liability 1892.96 399.79 629.01 679.66
864.92 1537.03 521.62 631.30
2. Expenses as above (I) 627.68 594.69 208.76 213.39
753.05 871.39 147.67 119.91
3. Employers Contribution (290.59) (504.79) (46.14) (79.37)
(36.70) (2008.63) (40.28) (71.54)
4. Difference in exchange (240.80) — — —
311.69 — — —
5. Closing Net Liability 1989.25 489.69 791.63 813.69
1892.96 399.79 629.01 679.67

VI. Actuarial Assumptions

1. Mortality Table (LIC) 1994-96 1994-96 1994-96 1996-98
(Ultimate)
2. Discount Rate 5% & 8% 8% & 8.25% 8% 8%
6% 7% 7% 7%
3. Increase in Salary/Health Care Cost/ 5% 8% & 9% 8% 8%
Pension 5% 5% & 7% 5% 3.75%
4. Rate of Return on Plan Assets — 7.50% & 8% 8% 8%
4% - 5% 7% 7% 7%
Note : Figures in italics under I to VI are of the previous year.

VII. Categories of plan assets as a percentage of the fair value of total plan assets Gratuity Gratuity
31-3-2009
% %
1. Government of India Securities 26 22
2. Corporate Bonds 65 67
3. Special Deposit Scheme 5 6
4. Insurer Managed Funds — 1
5. Others 4 4
100 100

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SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR

ENDED 31ST MARCH, 2010 (contd.)
VIII. Effect of Change in Assumed Health Care 2008-09
Cost Trend Rate Rupees in Lakhs Rupees in Lakhs

One One One One

percentage percentage percentage percentage
point point point point
increase decrease increase decrease

1. Effect on the aggregate of the service 68.21 66.28 64.74 62.57

cost and interest cost

2. Effect on defined benefit obligation 809.32 785.74 660.33 613.08

(a) The Actuarial calculations used to estimate defined benefit commitments and expenses are based on the above
assumptions which if changed would affect the defined benefit commitment’s size, the funding requirement and
expenses.
(b) The estimates of future salary increases, considered in the Actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
(c) The disclosure of Present value of Defined obligation. fair value of assets, surplus/(deficit) of Assets and Experience
adjustments of current year and preceding three years are as under:

Particulars 2008-09 2007-08 2006-07

Rupees Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs in Lakhs
1. Present Value of Defined benefit Obligation 8153.41 7247.36 5403.85 3981.55
2. Fair Value of Planned Assets 4069.15 3645.93 1848.98 1232.06
3. Surplus or (Deficit) of the Plan 4084.26 3601.43 3554.87 2749.49
4. Experience Adjustment
- On Plan Assets 72.09 49.66 14.99 6.56
- On Plan Liabilities (11.32) 1020.18 437.05 113.17
60.77 1069.84 452.04 119.73

(d) The details of the Company’s Defined Benefit plans for its employees are given above which are certified by the actuary
and relied upon by the auditors.
(e) Expected contribution of Rs. 836 Lakhs (31-3-2009 Rs. 833 Lakhs) to Defined Benefits (other than Provident Fund) for the
next year.
(f ) The Group has recognised the following amounts in the Profit and Loss Account under the head Group’s Contribution to
Provident Fund and Other Funds :

Particulars 2008-09
Rupees Rupees
in Lakhs in Lakhs
Provident Fund 825.04 833.91
Superannuation Fund 199.95 223.15
1024.99 1057.06
(g) The Company has not disclosed information related to defined benefits as required under AS-15 on Employee benefits
notified under the Companies (Accounting Standards) Rules, 2006 for foreign subsidiaries and joint ventures. However,
these companies are not material in relation to the Group.

98
SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31ST MARCH, 2010(contd.)
9. SALES AND SERVICES
With regard to long term Construction Contracts undertaken, the amount of net revenue recognised is Rs. 269964.32 Lakhs
(2008-09: Rs. 232149.96 Lakhs).

10. EARNINGS PER EQUITY SHARE

2008-09

Net Profit after Minority Interest and Share of Profit of Associate (Rs. Lakhs) 38099.10 25140.33

Weighted average number of Equity Shares outstanding 330884740 330884740

Earning Per Share (Rs.) - Basic and Diluted (Face value of Re.1 per share) 11.51 7.60

11. Derivative Instruments :

The Company has entered into the following derivative instruments :
Forward Exchange Contracts (being a derivative instrument), which are not intended for trading or speculative purposes,
but for hedge purposes, to establish the amount of reporting currency required or available at the settlement date of certain
payables and receivables.
The following are the outstanding Forward Exchange Contracts entered into by the Company :

Currency Amt. in Lakhs Sell / Buy Cross Currency

US Dollar 65.00 Buy Rupees

(40.00) Buy Rupees

GB Pound 3.00 Buy QAR

1.10 Buy US Dollar

(Nil) — —

Euro 34.56 Buy QAR

(24.37) Buy US Dollar

The pro-rata difference between the forward contract rate and the exchange rate on the date of transaction to be
charged / (credited) to Profit and Loss Account is Rs. 4.35 Lakhs (2008-09 : Rs.(0.13) Lakh).
Note : Figures in brackets are of the previous year.

12. LEASES
(a) Assets under operating leases :
(i) The Group has taken on operating lease certain assets. The total lease rent paid on the same amounting to
Rs. 4502.83 Lakhs (2008-09: Rs. 4801.34 Lakhs)
(ii) The minimum future lease rentals payable in respect of non-cancellable lease are as under :-

2008-09
Rupees Rupees
in Lakhs in Lakhs
Not later than one year 1384.12 1709.30
Later than one year but not later than five years 2306.75 3272.13
Later than five years 127.71 365.12

(iii) The Company has given on operating lease certain assets. The total lease rent received on the same amounting
to Rs. 3067.79 Lakhs (2008-09 : Rs.2553.29 Lakhs) is included under Other Income.

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SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR

ENDED 31ST MARCH, 2010 (contd.)
(iv) The minimum future lease rentals receivable in respect of non-cancellable lease are as under :

2008-09
Rupees Rupees
in Lakhs in Lakhs

Not later than one year 2968.37 2181.13

Later than one year but not later than five years 5270.63 3546.00

Later than five years 1732.35 581.59

(v) The Original Cost, Depreciation for the year and Written Down Value are Rs. 1307.78 Lakhs, Rs. 31.10 Lakhs and
Rs. 847.33 Lakhs (2008-09 : Rs.1474.54 Lakhs, Rs. 30.91 Lakhs and Rs. 962.35 Lakhs), respectively.

13. CONTINGENT LIABILITIES NOT PROVIDED FOR:

(a) Bills and Letter of Credits discounted with Banks : Rs.554.49 Lakhs (31-3-2009 : Rs. 364.18 Lakhs)

(b) Other Guarantees given Rs.16.71 Lakhs (31-3-2009 : Rs.18.76 Lakhs)

(c) Claims against the Group not acknowledged as debts :

In respect of various matters aggregating Rs. 26330.21 Lakhs (31-3-2009 : Rs. 23500.54 Lakhs) against which a provision
has been made for contingencies Rs.1125 Lakhs (31-3-2009 : Rs.1125 Lakhs). In respect of a contingent liability of
Rs. 4502.84 Lakhs (31-3-2009 : Rs. 4502.84 Lakhs), the Group has a right to recover the same from a third party.

(d) Income tax demands decided in Group’s favour by Appellate Authorities where the Department is in further appeal -
Rs.1300.30 Lakhs (31-3-2009 : Rs. 359.42 Lakhs).

(e) In respect of guarantees aggregating Rs.97739.05 Lakhs (31-03-2009 : Rs. 96452.68 Lakhs) issued by Banks at the request
of the Group in favour of third parties.

(f ) Staff demands under adjudication : Amount indeterminate.

(g) Liquidated damages, except to the extent provided, for delay in delivery of goods : Amount indeterminate.

14. Estimated amount of contracts remaining to be executed on capital account and not provided for : Rs.1481 Lakhs
(31-3-2009 : Rs. 2712.99 Lakhs). Advance paid against such contracts : Rs. 642.02 Lakhs (31-3-2009 : Rs. 735.54 Lakhs).

15. Auditors’ Remuneration:

2008-09
Rupees Rupees
in Lakhs in Lakhs

Audit Fees 103.15 82.26

Other Services 103.77 93.21

Out of Pocket Expenses 3.31 1.51

210.23 176.98

[The above excludes Service Tax availed Rs.16.16 Lakhs (2008-09 : Rs.16.38 Lakhs)]

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SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31ST MARCH, 2010(contd.)
16. The Group has consolidated the accounts of the following joint ventures as on 31st March, 2010 and its percentage holding is
given below :

Name of the Joint Venture % Holding

Lalbuksh Voltas Engineering Services & Trading L.L.C., Sultanate of Oman 49.00
Universal Voltas L.L.C., United Arab Emirates 49.00
Naba Diganta Water Management Ltd., India 26.00
Universal Weathermaker Factory L.L.C., United Arab Emirates 49.00
ETA-Voltas-Hitachi Plant, United Arab Emirates 37.50
NDIA Package 19 Project, Qatar 77.08
Sidra Medical & Research Centre Project, Qatar 51.08

The proportionate share of assets, liabilities, income and expenditure of the above joint venture companies / operations
included in these consolidated financial statements are given below :

2008-09
Rupees Rupees
in Lakhs in Lakhs
ASSETS
Net Block (including Capital WIP) 1889.70 1162.31
Current Assets 35947.64 31080.57
Loans and Advances 1140.66 2826.25
38978.00 35069.13
LIABILITIES
Reserves and Surplus 7357.31 6570.63
Secured Loans 2536.60 2636.59
Current Liabilities and Provisions 26565.40 25226.20
36459.31 34433.42
INCOME
Sale of Products and other Services 39913.54 34744.04
Other Income 329.96 (255.03)

EXPENSES
Cost of Sales, Services and Expenses 38165.78 33857.45
Depreciation 262.72 199.47
Interest 121.25 (36.70)
Impairment of Assets Nil 397.88
Taxes :
- Current 134.45 59.91
- Deferred Nil (135.00)
- Earlier years Nil 27.47
- Fringe Benefit Tax Nil 0.33
CONTINGENT LIABILITIES 24792.38 32054.22
CAPITAL COMMITMENT 272.90 1108.02

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SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR

ENDED 31ST MARCH, 2010 (contd.)
17(A). Information about Consolidated Segments :

Particulars 2008-09
Rupees Rupees
in Lakhs in Lakhs

1. SEGMENT REVENUE

(a) Segment - A ( Electro - mechanical Projects and Services ) 311340.70 276678.85

(b) Segment - B ( Engineering Products and Services ) 46802.90 54219.11

(c) Segment - C ( Unitary Cooling Products for Comfort and Commercial use ) 118709.02 92228.24

(d) Others 3911.13 10390.58

Less : Inter segment revenue 175.36 927.00

Net Sales / Income from Operations 480588.39 432589.78

2. SEGMENT RESULTS

(a) Segment - A ( Electro - mechanical Projects and Services ) 30909.39 21341.55

(b) Segment - B ( Engineering Products and Services ) 7684.76 6264.53

(c) Segment - C ( Unitary Cooling Products for Comfort and Commercial use ) 12029.26 5503.01

(d) Others 717.64 901.91

51341.05 34011.00

Less : (i) Interest Paid 984.40 1275.19

(ii) Interest Received (1090.15) (1343.28)

(iii) Other unallocable expenditure net of unallocable income (1732.88) (3093.15)

Profit from Ordinary Activities before Tax 53179.68 37172.24

Segment Assets Segment Liabilities

As at As at
31-3-2009 31-3-2009
Rupees Rupees Rupees Rupees
Particulars in Lakhs in Lakhs in Lakhs in Lakhs

(a) Segment - A (Electro - mechanical Projects and 179345.51 178510.52 158490.51 164979.12
Services)

(b) Segment - B (Engineering Products and Services) 19468.58 25990.56 9872.00 13086.97

(c) Segment - C (Unitary Cooling Products for 48777.49 38608.37 34633.18 22493.03
Comfort and Commercial use)

(d) Others 2356.52 3449.39 1214.12 2142.47

Segment Total 249948.10 246558.84 204209.81 202701.59

Unallocated 88418.25 75746.60 25639.68 40628.89

338366.35 322305.44 229849.49 243330.48

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SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31ST MARCH, 2010 (contd.)
17(A). Information about Consolidated Segments (contd.) :
Non-Cash Expenses
Capital Expenditure Depreciation other than Depreciation
2008-09 2008-09 2008-09
Particulars Rupees Rupees Rupees Rupees Rupees Rupees
in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs in Lakhs

(a) Segment - A ( Electro - mechanical 1305.75 2381.90 890.30 787.59 1048.96 4023.19
Projects and Services )

(b) Segment - B ( Engineering 216.51 510.88 135.10 122.00 275.56 88.23

Products and Services )

(c) Segment - C ( Unitary Cooling 159.72 175.10 406.63 505.46 1593.94 529.26
Products for Comfort and
Commercial use )
(d) Others 33.46 83.92 71.43 78.35 73.55 119.10
Segment Total 1715.44 3151.80 1503.46 1493.40 2992.01 4759.78
Unallocated 843.85 1889.13 637.50 602.96 — —
2559.29 5040.93 2140.96 2096.36 2992.01 4759.78

17(B). Information about Consolidated Secondary Business Segments :

2008-09
Particulars Rupees Rupees
in Lakhs in Lakhs
Revenue by Geographical Market

India 282424.48 261994.01

Middle East 178309.11 153519.99

Others 19854.80 17075.78

Total 480588.39 432589.78

Capital Expenditure

India 1066.18 1549.12

Middle East 599.58 1517.17

Others 49.68 85.51

Total 1715.44 3151.80

Carrying Amount of Segment Assets

India 147275.57 128071.23

Middle East 98323.61 109788.21

Others 4348.92 8699.40

Total 249948.10 246558.84

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SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR

ENDED 31ST MARCH, 2010 (contd.)
18. Related Party Disclosures :
(a) List of Related Parties and Relationships :

Party Relation
A. Brihat Trading Private Ltd. Associate
Terrot GmbH (upto 20-3-2009)
B. Universal Voltas L.L.C. Joint Venture
Lalbuksh Voltas Engineering Services & Trading L.L.C.
Naba Diganta Water Management Ltd.
Universal Weathermaker Factory L.L.C. (w.e.f. 26-4-2008)
Universal Comfort Products Ltd. (upto 16-6-2008)
Saudi Ensas Company for Engineering Services W.L.L. (upto 27-1-2009)
AVCO Marine S.a.S. (Under liquidation)
Agrotech Industries Ltd. (Under closure)
C. Tata Sons Ltd. Promoters holding together with its
Subsidiary is more than 20%
D. Mr. A. Soni - Managing Director Key Management Personnel

18. (b) Related Party Transactions : (contd.):

Rupees In Lakhs
Transactions Associates and Key Management Promoter Total
Joint Ventures Personnel
Purchase of Goods [Refer 18 (c) (1)] 871.69 — — 871.69
(4196.49) (—) (—) (4196.49)

Sale of Goods [Refer 18 (c) (2)] 331.00 — 5.02 336.02

(228.99) (—) (4.36) (233.35)

Service Income [Refer 18 (c) (3)] 38.97 — 0.84 39.81

(2.16) (—) (5.22) (7.38)

Rental Income [Refer 18 (c) (4)] — — 0.94 0.94

(—) (—) (1.45) (1.45)

Freight Recovery [Refer 18 (c) (5)] — — — —

(16.28) (—) (—) (16.28)

Advertising Recovery [Refer 18 (c) (6)] — — — —

(67.25) (—) (—) (67.25)

Commission Received [Refer 18 (c) (7)] — — — —

(128.87) (—) (—) (128.87)

Remuneration Paid / Payable [Refer 18 (c) (8)] — 244.55 — 244.55

(—) (179.08) (—) (179.08)

Dividend Paid [Refer 18 (c) (9)] — — 1259.71 1259.71

(—) (—) (1062.88) (1062.88)

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SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR
ENDED 31ST MARCH, 2010 (contd.)
18. (b) Related Party Transactions : (contd.):
Rupees In Lakhs
Transactions Associates and Key Management Promoter Total
Joint Ventures Personnel

Tata Brand Equity [Refer 18 (c) (10)] — — 679.72 679.72

(—) (—) (610.19) (610.19)

Other Operating and Administration — — — —

Expenses - Received /Receivable (0.54) (—) (—) (0.54)
[Refer 18 (c) (11)]

Other Operating and Administration — — 48.86 48.86

Expenses -Paid/Payable [Refer 18 (c) (12)] (—) (—) (70.84) (70.84)

Advances Given [Refer 18 (c) (13)] — — 0.46 0.46

(—) (—) (—) (—)

Warranty Recovery [Refer 18 (c) (14)] — — — —

(8.53) (—) (—) (8.53)

Debit Balance Outstanding as on 74.24 — — 74.24

31-3-2010 [Refer 18 (c) (15)] (29.59) (—) (—) (29.59)

Credit Balance Oustanding as on 407.25 — 677.91 1085.16

31-3-2010 [Refer 18 (c) (16)] (221.06) (—) (591.91) (812.97)

Note: Figures in bracket are of previous year.

18. (c) Details of material (more than 10% of the total related party transactions of the same type) transactions with Related Party :(contd.):
Rupees In Lakhs
Name of Party Transaction Value Transaction Value
2008-09
1. Purchase of Goods
Universal Voltas L.L.C. 382.33 —
Universal Weathermaker Factory L.L.C. 489.35 —
Universal Comfort Products Ltd. — 3868.49

2. Sale of Goods
Naba Diganta Water Management Ltd. 331.00 226.55

3. Service Income
Universal Weathermaker Factory L.L.C. 38.97 —
Tata Sons Ltd. — 5.22
Universal Comfort Products Ltd. — 2.16

4. Rental Income
Tata Sons Ltd. 0.94 1.45

5. Freight Recovery
Universal Comfort Products Ltd. — 16.28

6. Advertising Recovery
Universal Comfort Products Ltd. — 67.25

105
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SCHEDULE ‘M’ : NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR

ENDED 31ST MARCH, 2010 (contd.)

18. (c) Details of material (more than 10% of the total related party transactions of the same type) transactions with Related Party :(contd.):
Rupees In Lakhs
Name of Party Transaction Value Transaction Value
2008-09

7. Commission Received
Terrot GmbH — 42.45
Universal Comfort Products Ltd. — 86.42

8. Remuneration Paid / Payable

Mr. A. Soni - Managing Director 244.55 179.08

9. Dividend Paid
Tata Sons Ltd. 1259.71 1062.88

10. Tata Brand Equity

Tata Sons Ltd. 679.72 610.19

11. Other Operating and Administration Expenses-Received/Receivable

Lalbuksh Voltas Engineering Services & Trading L.L.C. — 0.49

12. Other Operating and Administration Expenses -Paid/Payable

Tata Sons Ltd. 48.86 70.84

13. Advances Given

Tata Sons Ltd. 0.46 —

14. Warranty Recovery

Universal Comfort Products Ltd. — 8.53

15. Debit Balance Outstanding as on 31-3-2010

Naba Diganta Water Management Ltd. 70.63 26.43
Brihat Trading Private Ltd. — 3.06

16. Credit Balance Oustanding as on 31-3-2010

Tata Sons Ltd. 677.91 591.91
Universal Voltas L.L.C. 257.12 221.06
Universal Weathermaker Factory L.L.C. 150.13 —
19. Figures for the previous year have been regrouped, wherever necessary.

For and on behalf of the Board

Chairman Ishaat Hussain

Managing Director Sanjay Johri
Directors Nasser Munjee
N. J. Jhaveri
Ravi Kant
N. D. Khurody
N. N. Tata
J. S. Bilimoria
S. N. Menon
Nani Javeri
Executive Vice President (Finance) M. M. Miyajiwala
General Manager - Taxation
& Company Secretary V. P. Malhotra
Mumbai, 28th May, 2010

106
 Details of Subsidiary Companies as at 31st March, 2010

Name of Subsidiary Universal Rohini Saudi Ensas Simto Auto

Company Comfort Industrial Company for Investment Aircon
Products Electricals Weathermaker Engineering Company VIL Overseas (India)
Limited Limited Limited Services WLL Metrovol FZE Limited Enterprises B. V. Voice Antilles N. V. Limited
(UCPL) (RIEL) (WML) #@ (Saudi Ensas) #@ (Metrovol) # (Simto) (VOEBV) # (VANV) # (AAIL)

Rupees Rupees Dirhams Rupees Saudi Rupees Dirhams Rupees Rupees Rupees Rupees Rupees
in Lakhs in Lakhs (AED) in Lakhs Riyal (SR) in Lakhs (AED) in Lakhs in Lakhs Euro in Lakhs USD in Lakhs in Lakhs

1. Capital 2764.20 182.58 1500000 190.65 2600000 323.70 2000000 245.80 152.99 618729 374.15 400000 180.52 1130.00

2. Reserves and Surplus — 3873.84 18723306 2379.73 (3739943) (465.63) 1830939 225.02 1226.37 1690285 1022.12 200330 90.41 —

3. Total Assets 9410.20 15260.50 26229650 3333.79 5385569 670.50 4087928 502.40 46.30 1909419 1154.63 1824048 823.19 39.26
(Fixed Assets+Current
Assets)

4. Total Liabilities 6646.00 11204.08 6006344 763.41 6525512 812.43 256989 31.58 21.32 41000 24.79 1613718 728.27 113.14
(Debts+Current
Liabilities)

5. Investments — — — — — — — — 1354.38 25934* 15.68 390000 176.01 —

107
* excluding investment
in subsidiary

6. Turnover/Total Income 33215.37 21389.79 33422529 4248.00 10247946 1275.87 2006059 246.54 91.91 712919 431.10 505101 227.95 —

7. Profit/(Loss) before Tax 1334.77 1437.65 5052684 642.20 109248 13.60 (1754000) (215.57) 89.40 671009 405.76 492494 222.26 (0.21)

8. Provision for Taxation (71.68) 508.58 — — — — — — 2.56 — — 3558 1.61 —

9. Profit/(Loss) after Tax 1406.45 929.07 5052684 642.20 109248 13.60 (1754000) (215.57) 86.84 671009 405.76 488936 220.66 (0.21)

10. Equity Dividend — — — — — — — — — 154682 93.54 800000 361.04 —

# The foreign currency figures of Metrovol, VOEBV, VANV, WML and Saudi Ensas have been converted into Indian Rupees on the basis of appropriate exchange rates.
Exchange rate as on 31st March, 2010: 1 AED = Rs.12.29; 1 Euro = Rs.60.47; 1 USD = Rs.45.13.
@ Financials of WML and Saudi Ensas are for the year ended 31st December, 2009 : 1 AED = Rs.12.71; 1 SR = Rs.12.45.
VOLTAS
Annual Report 2009-2010

Notes

108
Systems
that save
Voltas offers a number of ‘Star’-rated
ACs: India’s
specialised solutions and first. Saving
upto 25% in
technologies that focus on ‘Green’ priorities energy

and uphold ‘Green’ values. Shown here are

some key products.
Variable Refrigerant
Flow systems for
HVAC combined with
Engineered Ozone
Systems for indoor
Four-way Four-way
Cassette Cassette Type air quality, resulting in
Type (Compact) lower energy costs

Floor-mounted One-way
Type Cassette
Type

Digital
Scroll
Condensing
Unit
Ceiling & Ducted
Floor Type Type

Wall-mounted Type
 Co-Gen Vapour
Absorption
Machine: recycling
heat from exhaust
gases / jacket
hot water for air
conditioning

Mahatma Phule MSSG,

one of numerous textile
mills at which energy usage
has been considerably
lowered through
technology improvements,
for a combined saving of ‘Green’ series
more than 5000 kw, in screw chillers
over thirty mills complying with
the Energy
Conservation
Building Code for
equipment efficiency

Clariflocculators:
among India’s
largest installations.
For making water
potable
Battery-
operated
warehousing
equipment
with a zero
carbon footprint

Forklift
with a
fuel-efficient
engine

Terex RH120E:
India’s largest
electrically-
operated hydraulic
excavator, noted
for its zero-exhaust
operation